UC-NRLF 


HG 

/9/£ 


B   M    b7b   31M 


NSURANCE  LAWS 


North   Dakota. 


DIGEST  1915 


W.  C.  TAYLOR 

MMIS*  l(  >NfP  <  )!:  INS1 


GIFT   OF 


COMPILATION 


OF  THE 


INSURANCE  LAWS 


OF  THE 

State  of  North  Dakota 

n 


IN  EFFECT  JULY  1,  1915 


BISMARCK,  1915 


Compiled  by 

W.  C.  TAYLOR 

Commissioner  of  Insurance 


INSURANCE  LAWS  OF 
NORTH  DAKOTA 


CONSTITUTION 

§  82.  There  shall  be  chosen  by  the  qualified  electors  of  the  state  at  the 
times  and  places  of  choosing  members  of  the  legislative  assembly,  a  secretary 
of  state,  auditor,  treasurer,  superintendent  of  public  instruction,  commissioner 
of  insurance,  three  commissioners  of  railroads,  an  attorney  general  and  one 
commissioner  of  agriculture  and  labor,  who  shall  have  attained  the  age  of 
twenty-five  years,  shall  be  citizens  of  the  United  States,  and  shall  have  the 
qualifications  of  state  electors.  They  shall  severally  hold  their  offices  at  the 
seat  of  government,  for  the  term  of  two  years  and  until  their  successors  are 
elected  and  duly  qualified,  but  no  person  shall  be  eligible  to  the  office  of 
treasurer  for  more  than  two  consecutive  terms. 


POLITICAL  CODE 

CHAPTER   4. 
Article  8 — The  Commissioner  of  Insurance. 

§  172.     Duties  OF.]     It  is  the  duty  of  the  commissioner  of  insurance: 

1.  To  see  that  all  laws  of  this  state  respecting  insurance  companies  are 
faithfully  executed. 

2.  To  file  in  his  office  the  articles  of  incorporation  of  all  insurance  com- 
panies organized  or  doing  business  in  this  state,  and  on  application  to  furnish 
a  certified  copy  thereof. 

3.  To  report  in  detail  to  the  attorney  general  any  violation  of  law  relative 
to  insurance  companies,  their  officers  or  agents. 

4.  To  furnish  the  insurance  companies  required  to  make  reports  to  him 
the  necessary  blank  forms  for  the  statements  required. 

5.  To  preserve  in  permanent  form  a  full  record  of  his  proceedings  and  a 
concise  statement  of  each  company  or  agency  visited  or  examined. 

6.  To  furnish  at  the  request  of  any  person  and  on  payment  of  his  fees 
certified  copies  of  any  record  or  paper  in  his  office,  when  he  deems  it  not  preju- 
dicial to  public  interests  so  to  do.  and  to  give  such  other  certificates  as  may 
be  provided  by  law. 

7.  To  furnish  a  written  report  to  the  governor  on  or  before  the  fifteenth 
day  of  November,  of  each  year  showing  his  official  acts,  the  receipts  and  ex- 
penditures of  his  department  during  the  preceding  fiscal  year,  the  condition  of 


493327 


4  •   '  *•'      '  •  ' ' '  INSURANCE  LAWS 

the  companies  doing  business  in  this  Btate  and  such  other  information  as  will 
exhibit  the  affairs  of  his  department;  which  report  shall  be  printed^  to  the 
number  of  five  hundred,  at  the  expense  oi'  the  state,  and  distributed  among 
the  members  of  the  succeeding  legislative  assembly,  and  otherwise  as  provided 
by  law.  Such  reporl  must  contain  only  an  abstract  of  the  reports  of  insurance 
companies. 

8.  To  send  a  copy  of  his  annual  report  to  the  insurance  commissioner  or 
other  similar  officer,  of  every  other  state  and  to  each  company  doing  business 
in  this  state. 

!).  To  communicate  on  request  to  the  insurance  commissioner  of  any  other 
state  any  facts  which  by  law  it  is  his  duty  to  ascertain  respecting  companies 
doing   business   within    such   state. 

10.  To  have  an  official  seal  and  to  employ  competent  clerks,  such  clerks 
to  discharge  such  duties  as  he  may  assign,  and  in  case  of  his  sickness  or  tem- 
porary absence  from  office,  his  chief  clerk  shall  have  authority  to  sign  his 
name  and  perform  such  other  duties  as  are  required  by  law  pertaining  to  the 
duties  of  such  commissioner  of  insurance.  (R.  C.  1905,  §  136;  R.  C.  1895, 
4   132.) 

§  173.  Fees.]  The  commissioner  of  insurance  shall  charge  and  collect 
such  fees  as  are  prescribed  in  chapter  18  of  the  civil  code.  (R.  C.  1905,  §  137; 
R.  C.  1899,  §  133.) 

§  174.  Salary  op  Commissioner  of  Insurance.]  The  commissioner  of 
insurance  shall  receive  an  annual  salary  of  three  thousand  dollars,  and  shall 
reside  at  the  capital  of  the  state.  (1909,  Ch.  216,  4  R,  C.  1905,  138;  R,  C. 
1895,  134.) 

In  R.  C.  1905,  138,  his  salary  of  two  thousand  dollars  is  "to  include  all 
services  performed  by  him. ' ' 

§  175.  Commissioner  Disqualified,  State  Examiner  to  Act,  When.] 
In  case  the  commissioner  of  insurance  is  a  director,  officer,  agent,  attorney,  a 
stockholder  of  or  directly  interested  in  any  insurance  company  except  as  an 
insured,  the  examination  of  such  company  shall  be  made  l>y  the  state  examiner, 
or  by  some  person  appointed  by  him;  and  no  officer  or  agent  of  any  insurance 
company  doing  business  in  this  state  shall  l>e  deputed  to  examine  the  affairs 
of  such  company.     (R.  C.  1905,  §  139;  R.  C.   1895,  §    135.) 


CHAPTER  49. 

Article  11 — Insurance  Tax   poh    Fire   Departments. 

§  3993.  Duty  of  Clerk.]  The  clerk  of  each  city,  town  or  village  in  this 
state  having  an  organized  fire  department  shall  on  or  before  the  thirty-first 
day  of  October  in  each  year  make  and  file  with  the  state  auditor  his  certificate 
Btating  the  existence  of  such  department,  and  the  date  of  its  organization,  the 
number  of  steam,  hand  or  other  engines,  hook  and  ladder  trucks,  and  hose 
carts  in  actual  use,  the  number  of  organized  companies,  the  number  of  mem- 
bers of  each  company,  and  the  system  of  water  supply  in  use  ra  such  depart- 
ment, together  with  such  other  facts  as  the  auditor  may  require.  (R.  C.  1905, 
§  2966;    L887,  Ch.  53,  J    1;   K.  C.   1899,  §  2462.) 


STATE  OF  NOETH  DAKOTA  '...'.       f, 

As  to  right  of  hose  company  to  share  of  insurance  premium  moneys  under 
statute.    Continental  Hose  Co.  No.  1  v.  Fargo,  17  N.  D.  5,  114  N.  W.  834. 

§  3994.  State  Auditor  to  Furnish  Blanks.  Insurance  Companies  to 
Make  Statements.]  The  blanks  required  by  law  to  be  furnished  by  the 
state  auditor  to  insurance  companies  shall  contain  the  names  of  the  cities, 
towns  and  villages  entitled  to  benefits  under  this  article,  and  every  insurance 
company  doing  business  in  this  state  shall  include  in  its  annual  statement  the 
amount  of  all  premiums  received  by  them  upon  policies  issued  on  property 
within  the  corporate  limits  of  such  city,  town  or  village  during  the  year  ending 
on  the  preceding  thirty-first  day  of  December.      (R.  C.  1905,  §  2967.) 

§  3995.  State  Auditor  to  Issue  Warrants.]  The  state  auditor  on  the 
first  day  of  June  thereafter  shall  issue  and  deliver  to  the  treasurer  of  such 
city,  town  or  village,  having  an  organized  fire  department  entitled  to  the  bene- 
fits of  this  article,  his  warrant  upon  the  state  treasurer  for  an  amount  equal 
to  two  per  cent,  of  the  premium  received  upon  policies  issued  on  property  in 
any  city,  town  or  village,  which  warrants  shall  be  numbered  consecutively,  and 
shall  each  specify  the  date  of  its  issuance  and  to  whom  payable,  and  such 
warrants  shall  be  paid  by  the  state  treasurer  to  the  treasurer  of  such  city, 
town  or  village,  upon  presentation  thereof,  and  when  so  received  by  said  treas- 
urer the  same  shall  be  paid  over  to  the  treasurer  of  each  separate  organized 
fire  company,  or  companies,  in  equal  proportion,  who  are  members  in  good 
standing  in  the  North  Dakota  Firemen's  Association,  and  having  a  member- 
ship of  at  least  fifteen  members  for  a  period  of  eight  months  prior  to  the  date 
of  the  certificate  of  the  clerk,  as  provided  in  section  3993,  and  having  the 
management  of  at  least  one  steam,  hand  or  fire  engine,  hook  and  ladder  truck 
or  hose  cart,  upon  the  written  order  of  such  company  or  companies,  approved 
by  the  city,  city  council,  trustees  or  other  governing  body  of  such  city,  town 
or  village;  provided,  that  in  cities,  towns  and  villages  having  a  paid  fire 
department,  the  amount  so  received  by  the  city,  town  or  village  treasurer  shall 
be  placed  in  a  fund  to  be  disbursed  by  the  city  council,  trustees,  or  other 
governing  body  of  such  city,  town  or  village  in  maintaining  such  fire  depart- 
ment.    (R.  C.  1905,  §  2968.) 

Appropriation  of  insurance  tax  to  fire  companies  is  constitutional.  Cutting 
v.  Taylor,  3  S.  D.  11,  51  N.  W.  949,  15  L.  R,  A.  691. 

On  right  to  injunction  against  city  treasurer  to  determine  rights  of  fire 
companies  to  money  claimed  under  statute.  Continental  Hose  Co.  No.  1  v. 
Mitchell,  15  N.  D.  144,  105  N.  W.  1108. 

§  3996.  Qualifications  of  Fire  Departments  and  Companies.]  No  city, 
town  or  village  having  one  or  more  organized  five  companies  therein,  shall  be 
entitled  to  any  of  the  benefits  arising  from  this  article,  unless  the  fire  depart- 
ment or  companies  shall  have  been  in  actual  existence  eight  months  prior  to 
the  filing  of  the  certificate  required  by  section  3993,  and  unless  such  fire 
department  or  company  shall  have  had  for  such  period,  as  a  part  of  its  equip- 
ment, at  least  one  steam,  hand  or  other  fire  engine,  truck  or  hose  cart,  with 
a  membership  of  at  least  fifteen  persons  for  said  period  of  eight  months. 
(R,  C.  1905,  §  2969.) 

§  3997.  Secretary  to  Notify  Treasurer.]  It  shall  be  the  duty  of  the 
secretary  of  the  North   Dakota    Firemen's  Association  to  notify   the  treasurer 


G        •■    ::..:.'•'.•,■         insurance  laws 

of  each  city,  town  or  village  entitled  to  the  benefits  of  this  article,  on  or  be- 
fore the  first  day  of  June  of  each  year,  of  the  name  of  the  treasurer  of  each 
department  or  Beparate  organized  company  in  good  standing  in  the  North 
Dakota  Firemen's  Association.     (R.  C.    1905,  §  2970.) 

§  3998.  Failure  to  File  Certificate  a  Waiver.]  If  the  certificate  re- 
quired by  section  3993  is  not  filed  with  the  auditor  on  or  before  the  thirty- 
first  day  of  October  in  each  year,  the  city,  town  or  village  so  failing  to  file 
such  certificate  shall  be  deemed  to  have  waived  and  relinquished  its  rights  for 
such  year  to  the  appropriation  herein  provided  for;  provided,  however,  that 
in  case  where  any  city  has  filed  its  certificate  for  three  successive  years  and 
drawn  money  thereunder  for  such  years,  the  certificate  herein  provided  for 
may  be  filed  at  any  time  up  to  and  including  March  first  of  the  succeeding 
year  without  waiving  the  right  to  the  appropriation  herein  named.  (R.  C. 
1905,  §  2971.) 


STATE   OF   NORTH   DAKOTA 


CIVIL  CODE 

CHAPTER   12. 

Corporations. 

Article  1 — The  Creation  of  Corporations. 

$  4494.  Corporation  Defined.]  A  corporation  is  a  creature  of  the  law, 
having  certain  powers  and  duties  of  a  natural  person.  Being  created  by  the 
law,  it  may  continue  for  any  length  of  time  which  the  law  prescribes.  (R.  C 
1905,  §  4162.) 

What  constitutes  de  facto  corporations.     118  Am.  St.  Rep.  253. 

As  to  similar  provision  in  Cal.  Civ  Code,  §  283,  see  Johnson  v.  Goodyear 
Min.  Co.,  127  Cal.  4,  47  L.  R.  A.  338,  78  Am.  St.  Rep.  17,  59  Pac.  304. 

§  4495.  Reserved  Power  op  Legislative  Assembly.]  Every  grant  of 
corporate  power  is  subject  to  alteration,  suspension  or  repeal  in  the  discretion 
of  the  legislative  assembly.     (R.  C.  1905,  §  4163.) 

§  4496.  Collateral  Inquiry  Prohibited.]  The  due  incorporation  of  any 
company,  claiming  in  good  faith  to  be  a  coloration  under  this  chapter,  and 
doing  business  as  such,  or  its  right  to  exercise  corporate  powers  shall  not  be 
inquired  into  collaterally  in  any  private  action  to  which  such  de  facto  corpora- 
tion may  be  a  party.     (R.  C.  1905,  §  4164.) 

Receipt  of  benefits  from  contract  with  corporation  estops  from  denying 
corporate  existence.  Building  &  Loan  Asso.  v.  Chamberlin,  4,  S.  D.  271,  56 
N.  W.  897;  School  Dist.  v.  Alderson,  6  D.  145,  41  N.  W.  466;  Wright  v.  Lee, 
2  S.  D.  596,  51,  N.  W.  706. 

Whether  corporation  has  exceeded  its  authority  in  purchasing  real  estate 
can  be  inquired  into  only  by  state.     Gilbert  v.  Hole,  2  S.  D.  164,  49  N.  W.  1. 

Attempted  incorporation  of  bank  creates  simply  a  partnership,  in  absence 
of  law  under  which  banking  corporation  might  be  formed.  Davis  v.  Stevens. 
104  Fed.  235. 

Statute  presupposes  a  de  facto  corporation;  it  does  not  preclude  private, 
persons  from  denying  existence,  de  jure  or  de  facto,  of  alleged  corporation. 
Davis  v.  Stevens,  104  Fed.  235. 

Due  incorporation  of  bank  cannot  be  inquired  into  in  action  by  depositor 
to  recover  amount  of  deposits  from  incorporators  after  bank's  insolvency. 
Mason  v.  Stevens,  16  S.  D.  320  N.  W.  424. 

$  4497.  Name  Required.]  Every  corporation  must  have  a  corporate  name 
which  it  has  no  power  to  change  unless  expressly  authorized  by  law;  but  the 
misnomer  of  a  corporation  in  any  written  instrument  does  not  invalidate  the 
instrument  if  it  can  be  reasonably  ascertained  1'rom  it  what  corporation  is  in- 
tended.    (R,  C.  1905,  §  4165.) 

§  4198.     Corporations  Classified.]     Corporations  are  either: 

1.  Public;   or, 

2.  Private.      (R,  C.    1905,   $   4166.) 


[NSUB  i.NCE  LAWS 

State  is  a  body  politic,  and  not  :i  corporation.  State  v.  Taylor,  7  S.  D. 
533,  6  1   \.  \V.  548. 

§  4499.  PUBLIC,  How  REGULATED.]  Public  corporations  arc  formed  nr 
organized  for  the  government  of  a  portion  of  the  state.  Such  corporations 
are  regulated  by  the  political  code  or  by  local  statute.     (R.  C.  1905,  §  4167.) 

State   is  body   politic  and  not  a  public  corporation.     State  V.  Taylor,   7   S. 

D.  533,  64  N.  W.  548. 

§  4500.  Private,  Purposes.]  All  corporations  not  public  are  private. 
Private  corporations  may  be  formed  for  any  purpose  for  which  individuals 
may  lawfully  associate  themselves.      (R.  C.  1905,  §  4168.) 

Corporation  organized  under  N.  D.  Rev.  Codes,  1899,  as  private  corpora- 
tion.    Arrison  v.  Company  D,  N.  D.  N.  G.,  12  N.  D.  554,  98  N.  W.  83,  1  A.  & 

E.  Ann.   Cas.  368. 

Restricting  membership  of  association  to  persons  belonging  to  certain 
fraternal  order  does  not  change  the  fact  that  it  is  a  corporation.  Masonic 
Association  v.  Taylor,  2  S.  D.,  324,  50  N.  W.  93. 

§  4505.  Contents  of  Articles.  |  The  articles  of  incorporation  must  set 
forth : 

1.  The  name  of  the  corporation. 

2.  The  purpose  for  which  it  was  formed. 

3.  The  place  where  its  principal  business  is  to  be  transacted. 

4.  The  term  for  which  it  is  to  exist. 

5.  The  number  of  its  directors  or  trustees  and  the  names  and  residences 
of  those  who  are  to  serve  until  their  successors  are  elected  and  qualified. 

6.  If  there  is  a  capital  stock,  its  amount  and  the  number  of  shares  into 
which  it  is  divided.     (R,  C.  1905,  §  4173.) 

As  to  similar  provision  in  Cal.  Civ.  Codes,  §  290,  see  People  ex  rel.  Schlin- 
der  v.  Plint.  64  Cal.  49,  28  Pacific,  495;  Thomas  v.  Placerville  Gold  Quartz 
Min.  Co.,  65  vCal.  600,  4  Pac.  641  ;  Chapman  v.  Dorav,  89  Cal.  52,  26  Pac. 
605;  Martin  v.  Deetz,  102  Cal.  55.  41  Am.  St.  Rep.  151,  36  Pac.  368;  Porter 
v.  Lassen  County  Land  and  Cattle  Co.,  127  Cal.  261,  59  Pac.  563;  People 
ex  rel.  Weatherly  v.  Golden  Gate  Lodge  No.  6  B.  P.  O.  E.,  Cal.  257,  60  Pac. 
865. 

§  4507.  Articles.  Railways,  etc.]  The  articles  of  incorporation  of 
railway  corporations  shall  be  in  compliance  with  section  4610;  of  insurance 
corporations,  in  compliance  with  section  4837;  of  fraternal  associations  or 
corporations,  in  compliance  with  section  5018;  of  banking  corporations,  in 
compliance  with  section  5148.     (R.  C.  1905,  §  4175.) 

Article  10 — Assessments  of  Stock. 

§  4570.  When  Levied.]  The  directors  of  any  corporation  formed  or  ex- 
isting under  the  laws  of  this  state,  after  one-fourth  of  its  capital  stock  has 
been  subscribed,  may  for  the  purpose  of  paying  expenses,  conducting  business 
or  paying  debts,  levy  and  collect  assessments  upon  the  subscribed  capital  stuck 
thereof  in  the  manner  and  form  and  to  the  extent  provided  herein.  (R.  C. 
1905,  §  4236.) 

As  to  similar  provisions  in  Cal.  Civ.  Code,  §  331,  see  rounglove  v.  Stein- 
man,  80  Cal.  375,  22  Pac.  189;  Lankershim  Ranch,  Land  &  Water  Co.  v.  Her- 
berger,  82  Cal.  600,  23  Pac.   134;   Arroyo   Ditch  &   Water  Co.  \.  Superior  Ct., 


STATE  OF  NORTH  DAKOTA  9 

92  OaJ.  47,  27  Am.  St.  Rep.  91,  28  Pac;  San  Joaquin  Land  &  Water  Co.  v. 
Beecher,  101  Cal.  70,  Pac.  349;  San  Bernardino  Invest.  Co.  v.  Merrill,  108 
Cal.  490,  41  Pac.  487;  Market  Street  B.  Co.  v.  Hartman,  116  Cal.  260,  48  Pac. 
65;  Herbert  Kraft  Co.  Bank  v.  Bank  of  Orland,  133  Cal.  04,  65  Pac.  143       . 

$  4571.  Limitation  of.]  No  assessment  must  exceed  ten  per  cent,  of  the 
amount  of  the  capital  stock  named  in  the  articles  of  incorporation,  except  in  the 
cases  ill  this  section   otherwise   provided  for,  as  follows: 

1.  If  the  whole  capital  of  a  corporation  has  not  been  paid  up,  and  the 
corporation  is  unable  to  meet  its  liabilities  or  to  satisfy  the  claims  of  its 
creditors,  the  assessment  may  be  for  the  full  amount  unpaid  upon  the  capital 
stock;  or,  if  a  less  amount  is  sufficient  then  it  may  be  for  such  a  percentage 
as  will  raise  that  amount. 

2.  The  directors  6"f  railroad  corporations  may  assess  the  capital  stock 
in  installments  of  not  more  than  ten  per  cent,  per  month,  unless  in  the 
articles  of  incorporation  it  is  otherwise  provided. 

3.  The  directors  of  fire  or  marine  insurance  corporations  may  assess  such 
a  percentage  of  the  capital  stock  as  they  deem  proper.     (R.  C.  1905,  §  4237.) 

Right  to  make  assessment  of  stock.     76  Am.  St.  Rep.  126. 

Effect  of  transfer  of  shares  of  stock  on  liability  for  unpaid  subscriptions. 
47  L.  R.  A.  246;  30  L.  R,  A.  (N.  S.)  2S3. 

Liability  of  pledge  of  stock  as  a  shareholder.  36  L.  R.  A.  139;  19  L.  R. 
A.   (N.  S.)   249. 

As  to  similar  provision  in  Cal.  Civ,  Code,  §  332,  see  Santa  Cruz  R.  Co.  v. 
Spreckles,  65  Cal.  193.  3  Pac.  661,  802;  Marysville  Electric.  Light  &  P.  Co.  v. 
Johnson,  93  Cal.  538,  27  Am.  St.  Rep.  215.  29  Pac.  126;  Kohler  v.  Agassiz,  99 
Cal.  93  Pac.  741;  Shively  v.  Eureka  Tellurium  Gold  Min.  Co..  129  Cal.  293,  61 
Pac.  939. 


CHAPTER  18. 

Insurance  Corporations. 

Article  1.     General  provisions,  §  4834. 
2.     Provisions  common  to  all  domestic  insurance  companies,  §§  4S35-4852. 
.3.     Domestic,  life  insurance  companies  to  deposit  securities  with   insurance 
commissioner,  §$  4S46-4852. 

4.  Misrepresentations  by  insurance  companies.  §§  4853-4854. 

5.  Discrimination  by  life  insurance  companies,  §§  4855-4856. 

6.  Disbursements  by  insurance  companies,  §  4857. 

7.  Diversion  of  funds  for  political  purposes  by  life  insurance,  §  4858. 

8.  Salaries  of  officers  and  agents  of  life  insurance  companies,  $$   4859- 
4860. 

9.  Investment  of  funds  of  life  insurance  companies,   $$   4861-4862. 

10.  Provisions  peculiar   to   domestic   stock  insurance  companies,    §§   4S63- 
4869. 

11.  Provisions  peculiar  to   domestic   mutual  insurance  companies,   §§   4870- 
48S1. 

12.  Surplus  of  life   insurance   company,    §§    4882-4887. 


10  INSURANCE  LAWS 

L3.  Consolidation    and    reinsurance    of    domestic    insurance    companies,    §§ 

4888-4893. 

14.  Provisions  peculiar  to  mutual  hail  insurance  companies,  §§  4894-4901. 

1".  When  hail  insurance  policies  take  effect,  §§  4902-4903. 

16.  Provisions  peculiar   to  fidelity  insurance  companies,   §§   4904-4912. 

17.  Provisions  peculiar  to  foreign  insurance  companies,  §  4913. 

18.  Provisions  common  to  all  insurance  companies,  §§  4914-4930. 

19.  Reports  of  life  insurance  companies,  §  4931. 

20.  County   mutual   companies,    §§   4932-4950. 

21.  Live  stock,  §§  4951-4956. 

22.  Chattel  mortgages  in  application,  §§  4957-4958. 

23.  Licensing  insurance  agents,  §§  4959-4960. 

24.  Resident   agents  for   transaction-  of  fire   insurance  business,   §§   4961- 
4964. 

Article  1. — General  Provisions. 

§  4834.  Terms  Defined.]  When  consistent  with  the  context  and  not 
obviously  used  in  a  different  sense  the  term  "company"  or  "insurance  com- 
pany." as  used  herein,  includes  all  corporations,  associations,  partnerships  or 
individuals  engaged  as  principals  in  the  business  of  insurance;  the  word 
"domestic"  designates  those  companies  incorporated  or  formed  in  this  state 
and  the  word  "foreign"  when  used  without  limitation  includes  all  those 
Formed  by  authority  of  any  other  state  or  government.  (R.  C:  1905,  §  4417.) 
Article  2 — Provisio>t"?  Common  to  all  Domestic  Insurance  Companies. 

§  4835.  Subject  to  What  Provisions  of  Law.]  All  insurance  companies 
now  or  hereafter  incorporated  or  formed  by  authority  of  any  law  of  this  state, 
except  when  otherwise  expressly  provided,  may  exercise  the  powers  and  shall 
be  subject  to  the  duties  and  liabilities  provided  by  this  chapter.  The  general 
provisions  of  law  relating  to  the  powers,  duties  anil  liabilities  of  corporations 
shall  apply  to  all  incorporated  domestic  insurance  companies,  so  far  as  such 
provisions  are  pertinent  and  not  in  conflict  with  other  provisions  of  law  re- 
lating to  such  companies.     (R.  C.  1905,  §  4418.) 

§  4836.  How  and  for  What  Purpose  Formed.]  Any  number  of  persons, 
not  less  than  seven,  may  form  a  corporation  to  carry  on  the  business  of  insur- 
ance, either  upon  the  stock  or  mutual  plan,  against  loss  or  damage  by  fire, 
lightning,  cyclone,  tornado  or  hail,  or  the  risks  of  inland  navigation  and  trans- 
portation, or  to  make  insurance  upon  the  lives  of  persons  and  every  insurance 
pertaining  thereto,  and  against  accidental  injuries  including  the  granting,  pur- 
chasing and  paying  of  annuities  ami  indemnities  and  to  transact  fidelity  in- 
surance and  corporate  suretyship.  An  insurance  company  incorporated  under 
the  provisions  of  this  chapter  shall  have  power  to  make  insurance  of  any  of 
the  kinds  hereinbefore  mentioned  which  shall  have  been  expressed  in  its  articles 
of  incorporation.     (R.  C.  1905,  §  4419.) 

§  4837.  Articles.  Contents.]  The  articles  of  incorporation  shall  set 
forth  in  addition  to  what  is  required  to  be  set  forth  in  section  4505  the  kind 
of  insurance  proposed  to  be  made  and  whether  on  the  stock  or  mutual  plan,  the 
period  for  the  commencement  and  termination  of  its  fiscal  year  and  the  period 
for  which  it  is  incorporated,  not  to  exceed  thirty  years,  and  shall  lie  filed  in 
the  office  of  the  commissioner  of  insurance.      Any  name  not   previously  in  use 


STATE  OP  NORTH  DAKOTA  H 

by  an  existing  corporation  may  be  adopted,  but  the  words  ' '  insurance  com- 
pany," or,  if  the  business  is  to  be  conducted  upon  the  mutual  principle,  the 
words  ' '  mutual  insurance  company ' '  shall  constitute  a  part  of  such  name. 
No  certificate  shall  be  granted  by  the  insurance  commissioner,  as  hereinafter 
provided,  if,  in  his  judgment,  the  name  adopted  too  closely  resembles  the  name 
of  an  existing  corporation,  or  is  liable  to  mislead  the  public.  (R.  C.  1905, 
§  4420.) 

§  4838.  Qualification  op  Directors.  Residence.]  One-third  of  the 
directors  and  all  of  the  executive  officers  of  a  domestic  insurance  company  must 
be  residents  of  this  state  and  each  of  the  directors  of  such  a  company,  if  it  has 
a  capital  stock,  must  be  the  owner  in  his  own  right  of  stock  of  such  company 
worth  at  par  at  least  five  hundred  dollars.     (R.  C.  1905,  §  4421.) 

§  4839.  Examination  of  Articles  by  Attorney  General.  Examination 
by  Commissioner  of  Insurance.  Certificate.]  The  articles  of  incorporation 
shall  be  examined  by  the  attorney  general  and  if  found  conformable  to  this 
article  and  not  inconsistent  with  the  constitution  and  laws  of  this  state,  shall 
be  certified  by  him  to  the  commissioner  of  insurance,  who  shall  thereupon  make 
an  examination  to  ascertain  whether  the  company  has  in  all  respects  complied 
with  the  requirements  of  law,  according  to  the  nature  of  the  business  proposed 
to  be  transacted  by  it  and  if  satisfied  by  such  examination  that  the  corpora- 
tion has  complied  with  the  law  he  shall  deliver  to  such  corporation  a  certified 
copy  of  the  articles  of  incorporation  and  a  certificate  to  the  effect  that  such 
corporation  has  complied  with  all  requirements  of  law,  which,  on  being  filed 
in  the  office  of  the  register  of  deeds  of  the  county  where  the  principal  office 
of  the  corporation  is  located,  shall  be  its  authority  to  commence  business  and 
issue  policies;  and  such  certified  copy  of  the  articles  of  incorporation  and  of 
such  certificate  may  be  used  for  or  against  such  company  with  the  same  effect 
as  the  originals,  and  shall  be  conclusive  evidence  of  the  fact  of  the  organization 
of  such  corporation.     (R.  C.  1905,  $  4422.) 

Taking  of  applications  in  mutual  insurance  company  is  necessary  step  in 
formation,  and  is  required  to  be  done  before  issuance  of  a  certificate  to  com- 
mence business.     Montgomery  v.  Harker,  9  N.  D.  527,  84  N.  W.  369. 

§  4840.  Reinsurance.]  Any  domestic  insurance  company  shall  have  power 
to  effect  reinsurance  of  any  risks  taken  by  it.     (R.  C.  1905,  §  4423.) 

Liability  of  reinsurer.    44  L.  R.  A.  (N.  S.)  317. 

§  4841.  Limitation  on  Trade.]  No  company  organized  under  this  chapter 
shall,  directly  or  indirectly,  deal  or  trade  in  buying  or  selling  any  goods,  waves, 
merchandise  or  other  commodities  whatever,  except  such  as  may  have  boon  in- 
sured by  such  company  and  are  claimed  to  be  damaged  by  reason  of  the  risk 
insured  against.     (R,  C.  1905,  §  4424.). 

§  4842.  Limitation  on  Purchase  and  Conveyance  of  Real  Estate.]  No 
domestic  insurance  company  shall  purchase,  hold  or  convoy  real  estate  except 
for  the  purpose  and  in  the  manner  herein  set  forth,  to-wit : 

1.  Such  as  shall  be  requisite  for  its  convenient  accommodation  in  the  trans- 
action of  its  business;  or, 

2.  Such  as  shall  have  been  mortgaged  to  it  in  good  faith  as  security  for 
loans  previously  contracted,  or  for  money  due;   or, 


12  INSURANCE  LAWS 

3.  Such  as  shall  have  been  conveyed  to  it  in  satisfaction  of  debts  previ- 
ously contracted  in  legitimate  business,  or  for  money  due;  or, 

4.  Such  as  shall  have  been  purchased  at  sales  upon  judgment  or  mortgage 
foreclosures  obtained  or  made  for  such  debts.     (R.  C.  1905,  §  4425.) 

§  4843.  Capital  and  Surplus  Invested.]  A  domestic  insurance  company 
may  invest  its  capital,  and  the  funds  accumulated  in  the  course  of  its  business, 
or  any  part  thereof,  in  bonds  or  mortgages  on  improved  unincumbered  real 
estate  within  this  state,  or  within  any  state  in  which  such  company  is  or  be- 
comes duly  authorized  and  licensed  to  transact  business,  worth  double  the  sum 
loaned  thereon,  exclusive  of  buildings,  unless  such  buildings  are  insured  and 
the  policies  made  payable  to  the  company  as  its  interest  may  appear,  and  also 
in  the  bonds  of  the  state,  or  bonds  or  treasury  notes  of  the  United  States,  and 
also  in  the  bonds  of  any  county  or  incorporated  city  or  school  district  in  this 
state,  or  within  any  state  in  which  said  company  is  or  becomes  duly  authorized 
and  licensed  to  transact  business,  authorized  to  be  issued  by  legal  authority, 
and  loan  such  capital  and  funds,  or  any  part  thereof,  on  the  security  of  such 
bonds,  treasury  notes,  or  upon  bonds  or  mortgages  as  aforesaid,  and  change 
and  re-invest  the  same  in  like  securities  as  occasion  may  from  time  to  time 
require;  but  the  surplus  money  over  and  above  the  capital  stock  of  such  insur- 
ance company  may  be  invested  in  or  loaned  upon  the  pledge  of  bonds  of  the 
United  States  or  any  of  the  state,  or  stocks,  bonds,  or  other  evidence  of  in- 
debtedness of  any  solvent  dividend  paying  institution  incorporated  under  the 
laws  of  this  state,  or  of  any  state  in  which  such  company  is  or  becomes  duly 
authorized  and  licensed  to  transact  business,  or  of  the  United  States,  except 
its  own  stock;  provided  always,  that  the  market  value  of  such  stock,  bonds  or 
other  evidence  of  indebtedness  shall  be  at  all  times  during  the  continuance  of 
such  loan  at  least  ten  per  cent,  more  than  the  amount  loaned  thereon.  No 
domestic  insurance  company  shall  invest  or  loan  its  capital,  or  the  funds  ac- 
cumulated in  the  course  of  its  business,  or  any  part  thereof,  except  as  provided 
in  this  section.     (R,  C.  1905,  §  4426.) 

§  4844.  Dividends  Only  From  Surplus  Profits.  Profits,  How  Esti- 
mated.] No  domestic  insurance  company  shall  make  any  dividends  except 
from  the  surplus  profits  arising  from  its  business;  and  in  estimating  such 
profits  there  shall  be  reserved  therefrom  a  sum  equal  to  forty  per  cent,  of  the 
amount  of  premiums  on  all  unexpired  risks  and  policies,  which  amount  so 
reserved,  is  hereby  declared  to  be  unearned  premiums;  and  there  shall  also  be 
reserved  all  sums  due  the  company  on  bonds,  mortgages,  stocks  and  book 
accounts  of  which  no  part  of  the  principal  or  interest  thereon  has  been  paid 
during  the  year  preceding  such  estimate  of  the  profits,  and  upon  which  suit 
for  foreclosure  or  collection  has  been  commenced,  or  which  after  judgment 
has  been  obtained  thereon  shall  have  remained  more  than  one  year  unsatisfied 
and  "ii  which  interest  shall  not  have  been  paid.     (R.  C.  1905.  §  4427.^ 

§  4845.  Penalty  FOB  VIOLATION  OF  Section  4843.]  Any  director  or 
officer  making  or  authorizing  an  investment  or  loan  in  violation  of  section  4843 
shall  be  personally  liable  to  the  stockholders  for  any  loss  occasioned  thereby. 
If  a  company  is  under  liability  for  losses  equal  to  its  net  assets  and  the  presi- 
dent and  directors,  knowing  it,  make  or  assent  to  further  insurance,  they  shall 
be   personally   liable   for  any   loss  under  such   insurance.     If  the  directors  allow 


STATE  OF  NORTH  DAKOTA  13 

to  be  insured  on  a  single  risk  a  larger  sum  than  the  law  permits  they  shall 
be  liable  for  any  loss  thereon  above  the  amount  they  might  lawfully  insure, 
unless  the  excess  is  reinsured  as  required  in  ssction  4914.     (R.  C.  1905,  §  4428.) 

Article  3 — Domestic  Life  Insurance  Companies  to  Deposit  Securities 
With  Insurance  Commissioner. 
§  4846.  Annual  Statement.]  The  president  or  vice-president  and  secre- 
tary or  actuary  or  a  majority  of  the  directors  of  each  company  organized  under 
the  laws  of  this  state  shall  annually,  by  the  first  Monday  in  February,  prepare 
under  oath  and  file  in  the  office  of  the  commissioner  of  insurance  a  statement 
of  its  affairs  for  the  year  terminating  on  the  thirty-first  day  of  December, 
preceding,  showing: 

1.  The  name  of  the  company  and  where  located. 

2.  The  names  of  its  officers. 

3.  The  amount  of  capital,  if  a  stock  company. 

4.  The  amount  of  capital  paid  in,  if  a  stock  company. 

5.  The  value  of  real  estate  owned  by  the  company. 

6.  The  amount  of  cash  on  hand.  . 

7.  The  amount  of  cash  deposited  in  banks,  giving  the  name  of  the  bank 
or  banks. 

8.  The  amount  of  cash  in  the  hands  of  agents  and  in  the  course  of  trans- 
mission. 

9.  The  amount  of  bonds  of  the  United  States,  and  all  other  bonds  and 
securities,  giving  names  and  amounts,  with  the  par  and  market  value  of  each 
kind. 

10.  The  amount  of  loans  secured  by  first  mortgage  on  real  estate  and 
where  such  real  estate  is  situated. 

11.  The  amount  of  all  other  bonds,  loans,  how  secured,  and  the  rate  of 
interest. 

12.  The  amount  of  premium  notes  and  their  value  on  policies  in  force, 
if  a  mutual  company. 

13.  The  amount  of  notes  given  for  unpaid  stock,  and  their  value  in  detail, 
if  a  stock  company. 

14.  The  amount  of  assessments  unpaid  on  stock  or  premium  notes. 

15.  The  amount  of  interest  due  and  unpaid. 

16.  The  amount  of  all  other  securities. 

17.  The  amount  of  losses  due  and  unpaid. 

18.  The  amount  of  losses  adjusted  but  not  due. 

19.  The  amount  of  losses  unadjusted. 

20.  The  amount  of  claims  for  losses  resisted. 

21.  The  amount  of  money  borrowed  and  evidences  thereof. 

22.  The  amount  of  dividends  unpaid  on  stock. 

23.  The  amount  of  dividends  unpaid  on  ytolicies. 

24.  The  amount  required  to  safely  reinsure  all  outstanding  risks. 

25.  The  amount  of  all  other  claims  against  the  company. 

26.  The  amount  of  net  cash  premiums  received. 

27.  The  amount  of  notes  received  for  premiums. 

28.  The  amount  of  interest  received  from  all  sources. 

29.  The  amount  of  moneys  received  from  all  other  sources. 


14  INSURANCE  LAWS 

30.  The  amount  paid  for  losses. 

31.  The  amount  of  dividends  paid  to  policy  holders,  and  the  amount  to 
stockholders,  if  a  stock  company. 

32.  The  amount  of  commissions  and  salaries  paid  to  agents. 

33.  The  amount  paid  to  officers  for  salaries  and  other  compensation. 

34.  The  amount  paid  for  taxes. 

35.  The  amount  of  all  other  payments  and  expenditures. 

36.  The  greatest  amount  insured  on  any  one  life. 

37.  The  amount  deposited  in  other  states  or  territories  as  security  for 
policy  holders  therein,  stating  the  amount  in  each  state  or  territory. 

38.  The  amount  of  premiums  received  in  this  state  during  the  year. 

39.  The  amount  paid  for  losses  in  this  state  during  the  year. 

40.  The  whole  number  of  policies  issued  during  the  year,  with  the  amount 
of  insurance  effected  thereby,  and  total  amount  of  risk. 

41.  All  other  items  of  information  necessary  to  enable  the  commissioner 
of  insurance  to  correctly  estimate  the  cash  value  of  policies  or  to  judge  of  the 
correctness  of  the  valuation  thereof.     (1909,  Ch.  150,  §  1.) 

§  4847.  Commissioner  Ascertains  Value  of  Policies.  Securities  to  be 
Deposited.]  As  soon  as  practicable  after  the  filing  of  such  statement  the  in- 
surance commissioner  shall  ascertain  the  net  cash  value  of  every  policy  in  force 
upon  the  basis  of  the  American  table  of  mortality  and  four  and  one-half  per 
cent,  interest,  or  actuaries  combined  experience  table  of  mortality  and  four 
per  cent,  interest,  in  all  companies  organized  under  the  laws  of  this  state.  The 
company  may  make  such  valuation  and  make  and  file  the  same  with  such 
annual  statement,  and  it  shall  be  received  by  the  insurance  commissioner  upon 
satisfactory  proof  of  its  correctness.  The  net  cash  value  of  all  policies  in  force 
in  any  such  company  being  ascertained,  the  insurance  commissioner  shall  notify 
it  of  the  amount,  and  within  thirty  days  thereafter,  the  officers  thereof  shall 
deposit  with  the  insurance  commissioner  the  amount  of  the  ascertained  value 
in  the  securities  specified  in  chapter  156  of  the  session  laws  of  1907  (sections 
4861,  4862,  herein)  ;  provided,  however,  that  no  stock  company  organized  under 
the  laws  of  this  state  shall  be  required  to  make  a  deposit  of  such  securities 
in  an  amount  exceeding  one  hundred  thousand  dollars;  and  when  securities 
in  that  amount  shall  have  been  deposited  then  sucli  insurance  company  may, 
and  the  insurance  commissioner  shall  accept  in  lieu  of  further  deposit,  a  de- 
tailed, verified  statement  setting  forth  a  list  of  the  items  of  security  held  by 
such  insurance  company  with  sufficient  particularity;  and  such  securities  so 
specified  in  such  list,  although  retained  by  such  insurance  company,  shall  be 
kept  separate  and  distinct  from  its  other  securities  and  shall  be  held  as  a 
deposit  for  the  policy  holders  of  said  company  under  the  provisions  of  this 
section. 

The  insurance  commissioner  may  at  any  time  make  a  personal  examination 
of  the  books,  papers,  securities  and  business  of  any  such  life  insurance  com- 
pany or  authorize  any  other  suitable  person  to  make  the  same,  and  he  or  the 
person  so  authorized  may  examine  under  oath  any  officer  or  agent  of  the  com- 
pany, or  others,  relative  to  its  business  and  management.  If  upon  such  exam- 
ination the  insurance  commissioner  is  of  the  opinion  that  the  company  is  in- 
solvent, or  that  its  condition  is  such  as  to  render  a  further  continuance  of  its 


STATE  OF  NORTH  DAKOTA  15 

business  hazardous,  then  the  insurance  commissioner  may  require  such  insur- 
ance company  to  forthwith  deposit  in  his  office  all  of  such  securities  so  listed 
and  specified  in  said  list,  and  not  deposited;  provided,  however,  that  nothing 
herein  contained  shall  be  construed  as  preventing  or  prohibiting  any  domestic 
life  insurance  company  from  depositing  such  securities  in  an  amount  to  exceed 
the  cash  value  of  its  policies.     (1909,  Ch.  150,  §  2.) 

§  4848.  Certificate  op  Authority.]  On  receipt  of  such  deposit  and  state- 
ment and  such  detailed  list  of  securities  provided  for  in  the  preceding  section, 
all  of  which  shall  be  renewed  annually,  by  the  first  Monday  in  February,  the 
insurance  commissioner  shall  issue  a  certificate  to  the  effect  that  such  insurance 
company  does  business  under  the  compulsory  reserve  deposit  law  of  the  State 
of  North  Dakota,  and  maintains,  in  accordance  with  section  2  of  said  law,  in 
the  office  of  the  insurance  commissioner  of  the  State  of  North  Dakota,  a  deposit 
of  an  amount  in  excess  of  the  net  cash  value  of  all  outstanding  policies  in 
stipulated  and  high-class  securities,  deposited  for  the  protection  of  the  policy 
holders  of  said  company,  which  certificate  shall  expire  on  the  thirty-first  day 
of  March  of  the  ensuing  year.  Such  certificate  shall  be  renewed  annually  upon 
a  renewal  of  the  deposit  or  statement  provided  for  under  the  preceding  sections, 
and  upon  compliance  with  the  conditions  above  required.  The  insurance  com- 
missioner shall  receive  the  sum  of  five  dollars  for  issuing  such  certificate ; 
provided,  that  a  copy  of  such  certificate  may  be  attached  to  any  policy  of  in- 
surance hereafter  or  heretofore  issued  by  any  life  insurance  company  organized 
under  the  laws  of  this  state,  upon  its  compliance  with  the  provisions  of  this 
act.      (1909,  Ch.  150,  §  3.) 

§  4849.  On  Default  Securities  Vest  in  Policy  Holders.]  The  securi- 
ties of  a  defaulting  or  insolvent  company  or  a  company  against  which  pro- 
ceedings are  pending  for  dissolution,  on  deposit  shall  vest  in  the  state  for  the 
benefit  of  the  policies  on  which  such  deposit  is  made  or  were  made,  and  the 
proceeds  of  the  same  shall,  by  order  of  the  court  upon  final  hearing  be  divided 
among  the  holders  thereof  in  the  proportion  of  the  last  annual  valuation  of 
the  same,  or  at  any  time  be  applied  to  the  purchase  of  reinsurance  for  their 
benefit.     (1909,  Ch.  150,  §  4.) 

§  4850.  Securities  May  be  Exchanged.]  Companies  shall  have  the  right 
at  any  time  to  change  the  securities  on  deposit  by  substituting  a  like  amount 
of  the  character  required  in  the  first  instance.  If  the  annual  valuation  of  the 
policies  in  force  shows  them  to  be  less  than  the  amount  of  the  security  de- 
posited, then  the  company  may  withdraw  such  excess,  but  twenty-five  thousand 
dollars  must  always  remain  on  deposit.     (1909,  Ch.  150,  $  5.) 

$  4851.  Dividends  on  Securities  Property  of  Company.]  Companies 
having  on  deposit  with  the  insurance  commissioner  bonds  or  other  securities 
may  collect  the  dividends  or  interest  thereon,  delivering  to  their  authorized 
agents  the  coupons  or  other  evidence  of  interest  as  the  same  become  due,  but 
if  any  company  fails  to  deposit  additional  securities  when  and  as  called  for 
by  the  insurance  commissioner,  or  pending  any  proceedings  to  close  up  or  enjoin 
it,  the  insurance  commissioner  shall  collect  such  dividends  or  interest  and  add 
the  same  to  such  securities.     (1909,  Ch.  150,  §  6.) 

§  4852.  Exception  to  Act.]  None  of  the  provisions  of  this  act  shall 
apply  to  fraternal  beneficiary  associations.      (1909.  Ch.  150,  §  7.) 


16  [NSUR  VNCK  LAWS 

ARTICLE  4 — MISREPRESENTATION    I'.V    Ixsl'UANCE   COMPANIES. 

$  is.",:;.  Prohibited.]  No  life  insurance  company  doing  business  in  this 
state,  and  no  officer,  director  or  agent  thereof,  shall  issue  or  circulate,  or  cause 
or  permit  to  be  issued  or  circulated,  any  estimate,  illustration,  circular  or 
statement  of  any  sort  misrepresenting  the  terms  of  any  policy  issued  by  it  or 
the  benefits  or  advantages  promised  thereby,  or  the  dividends  or  shares  of 
surplus  to  be  received  thereon,  or  shall  use  any  name  or  title  of  any  policy 
or  class  of  policies  misrepresenting  the  true  nature  thereof.  (1907,  Ch.  147, 
§  1.) 

§  4854.  Penalty.]  An  officer,  agent,  solicitor  or  any  representative  of 
any  life  insurance  company  violating  the  provisions  of  this  act,  shall  be  deemed 
guilty  of  a  misdemeanor.  Any  life  insurance  company  found  guilty  of  a 
violation  of  the  provisions  of  this  act  by  the  commissioner  of  insurance  upon 
a  hearing,  after  fifteen  days'  notice,  shall  be  subject  to  a  penalty  to  be  by 
such  commissioner  of  insurance  imposed,  of  not  to  exceed  $500,  in  default  of 
the  payment  of  which  he  is  authorized  to  revoke  the  license  of  such  company; 
and  provided,  that  upon  a  second  conviction  upon  a  similar  hearing  the  com- 
missioner of  insurance  shall  revoke  the  license  of  such  company  to  transact 
business  in  the  state.      (1907,  Ch.  147,   §  2.) 

Article  5 — Discrimination  by  Life  Insurance  Companies. 

§  4855.  Prohibited.]  No  life  insurance  company  doing  business  in  this 
state  shall  make  or  permit  any  distinction  or  discrimination  in  favor  of  in- 
dividuals between  insurants  (the  insured)  of  the  same  class  and  equal  expecta- 
tion of  life  in  the  amount  or  payment  of  premiums  or  rates  charged  for  policies 
of  life  or  endowment  insurance,  or  to  the  dividends  or  other  benefits  payable 
thereon,  or  in  any  other  of  the  terms  or  conditions  of  the  contracts  it  makes. 
nor  shall  any  such  company  or  agent  thereof  make  any  contract  of  insurance 
or  agreement  as  to  such  contract  other  than  as  plainly  expressed  in  the  policj 
issued  thereon,  nor  shall  any  such  company  or  any  officer,  agent,  solicitor  or 
representative  thereof,  pay,  allow  or  give,  or  offer  to  pay,  allow  or  give,  directly 
or  indirectly  as  inducement  to  insurance,  any  rebate  or  premium  payable  on 
their  policy,  or  any  special  favor  or  advantage  in  the  dividends  or  other  benefits 
to  accrue  thereon,  or  any  paid  employment  or  contract  for  services  of  any  kind 
or  any  valuable  consideration  or  inducement  whatever  not  specified  in  the 
policy  contract  of  insurance,  or  give,  sell  or  purchase,  or  offer  to  give,  sell 
or  purchase  as  inducement  to  insurance  or  connection  therewith  any  stocks, 
bonds  or  other  securities  of  any  insurance  company  or  other  corporation, 
association  or  partnership,  or  any  dividends  or  profits  to  accrue  thereon  or  any- 
thing of  value  whatsoever  not  specified  in  the  policy.      (1907.  Ch.  148,  $  1.) 

Power  of  legislature  to  regulate  life  insurance  rates;  37  L.  "R,  A.  (N.  S.) 
778. 

§  4856.  Penalty.]  Any  officer,  agent,  solicitor  or  any  representative  of 
any  life  insurance  company  violating  the  provisions  of  this  act  shall  be  deemed 
guilty  of  a  misdemeanor.  Any  life  insurance  company  found  guilty  of  a 
violation  of  the  provisions  of  this  act  by  the  commissioner  of  insurance  upon 
a  hearing,  after  fifteen  days'  notice,  shall  be  subject  to  penalty  to  be  by  such 
commissioner  of  insurance   imposed,  of  not  to   exceed   $500,   in   default  of  the 


STATE  OF  NORTH  DAKOTA  17 

payment  of  which  he  is  authorized  to  revoke  the  license  of  such  company;  and 
provided,  that  upon  a  second  conviction  upon  a  similar  hearing  the  commis- 
sioner of  insurance  shall  revoke  the  license  of  such  company  to  transact  business 
in  the  state.     (1907,  Ch.  148,  §  2.) 

Article  6— Disbursements  by  Life  Insurance  Companies. 
§  4857.  VOUCHEE  REQUIRED.]  No  domestic  life  insurance  company  shall 
make  any  disbursements  of  one  hundred  dollars  or  more  unless  the  same  be 
evidenced  by  a  voucher  signed  by  or  in  behalf  of  the  person,  firm  or  corpora- 
tion receiving  the  money  and  correctly  describing  the  consideration  for  the 
payment.  If  the  expenditure  be  for  both  services  ami  disbursements  the 
voucher  shall  set  forth  the  services  rendered  and  an  itemized  statement  of 
the  disbursements  made.  If  the  expenditure  be  in  connection  with  any  matter 
pending  before  any  legislative  or  public  body,  or  before  any  department  or 
officer  of  any  state  or  government,  the  voucher  shall  correctly  describe,  in 
addition,  the  nature  of  the  matter  and  of  the  interest  of  such  company  therein. 
When  such  voucher  cannot  be  obtained  the  expenditure  shall  be  evidenced  by 
an  affidavit  describing  the  character  ami  object  of  the  expenditure  and  stating 
the  reason  for  not  obtaining  such  voucher.     (1907,  Ch.  149.) 

Article  7 — Diversion  of  Funds  for  Political  Purposes  by  Life  Insurance 

Companies. 
§  4858.  Unlawful  to  Aid  Political  Parties.  Penalty.]  No  insurance 
company  or  association,  including  fraternal  beneficiary  associations,  doing 
business  in  this  state,  shall,  directly  or  indirectly,  pay  or  use  or  offer,  consent 
or  agree  to  pay  or  use  any  money  or  property  for  or  in  aid  of  any  political 
party,  committee  or  organization,  or  for  or  in  aid  of  any  corporation,  joint 
stock  or  other  associations,  organized  or  maintained  for  political  purposes,  or  for 
or  in  aid  of  any  candidate  for  political  office,  or  for  nomination  for  such  office, 
or  for  any  political  purpose  whatsoever,  or  for  the  reimbursement  or  indemnifi- 
cation of  any  person  for  money  or  property  so  used.  Any  officer,  director, 
stockholder,  attorney  or  agent  of  any  corporation  or  association  which  violates 
any  of  the  provisions  of  tins  act,  who  participates  in,  aids,  abets,  or  advises 
or  consents  to  any  such  violation,  and  any  person  who  solicits  or  knowingly 
receives  any  money  or  property  in  violation  of  this  aid.  shall  be  guilty  of  a 
misdemeanor  and  be  punished  by  imprisonment  for  not  more  than  one  year 
and  a  fine  of  not  more  than  one  thousand  dollars,  and  any  officer  aiding  or 
abetting  in  any  contribution  made  in  violation  of  this  act,  shall  be  liable  to 
the  company  or  association  for  the  amount  so  contributed.  No  person  shall 
be  excused  from  attending  and  testifying  or  producing  any  books,  papers  or 
other  documents  before  any  court  or  magistrate,  upon  any  investigation,  pro- 
ceeding or  trial  for  a  violation  of  any  of  the  provisions  of  this  aid.  upon  the 
ground  or  for  the  reason  that  the  testimony  or  evidence,  documentary  or  other- 
wise, required  of  him.  may  tend  to  incriminate  or  degrade  him;  but  no  person 
shall  be  prosecuted  or  subject  to  any  penalty  or  forfeiture  for  or  on  account 
of  any  transaction,  matter  or  thinir  concerning  which  he  may  testify  or  produce 
evidence,  documentary  or  otherwise,  and  no  testimony  so  given  or  produced 
shall  be  used  against  him  UT)OH  an\  criminal  investigation  or  proceeding. 
(1007.   Ch.   52.) 


18  INSURANCE  LAWS 

Article  8 — Salaries  of  Officers  and  Agents  of  Life  Insurance  Companies. 

§  4859.  Exfenses  of  Officers,  How  Regulated.]  No  domestic  life  insur- 
ance company  shall  pay  any  salary,  compensation  or  emolument  to  any  officer, 
trustee  or  director  thereof,  nor  any  salary,  compensation  or  emolument  amount- 
ing in  any  one  year  to  more  than  five  thousand  dollars  to  any  one  person,  firm  or 
corporation  unless  such  payment  be  first  authorized  by  a  vote  of  the  board  of 
directors  of  such  life  insurance  company.  No  such  life  insurance  company 
shall  make  any  agreement  with  any  of  its  officers,  trustees  or  salaried  employes 
whereby  it  agrees  that  for  services  rendered  or  to  be  rendered  he  shall  receive 
any  salary,  compensation  or  emolument  that  will  extend  beyond  a  period  of 
twelve  months  from  the  date  of  such  agreement;  and  no  officer,  director  or 
trustee,  who  is  paid  a  salary  for  his  services  of  more  than  one  hundred  and 
fifty  dollars  per  month,  shall  receive  any  other  compensation  or  emolument; 
provided,  that  the  limitation  as  to  time  contained  herein  shall  not  be  construed 
as  preventing  a  life  insurance  company  from  entering  into  contracts  with  its 
agents  for  the  payment  of  renewal  commissions.  No  such  company  shall  grant 
any  pension  to  any  officer,  director  or  trustee  thereof  or  to  any  member  of  his 
family   after   his   death.      (1907,    Ch.    154,    §    1.) 

Article  9 — Investment  of  Funds  of  Life  Insurance  Companies. 
§  4861.  Investment  of  Funds  Restricted.]  No  domestic  life  insurance 
company,  whether  incorporated  by  special  act  or  under  a  general  law,  shall, 
after  the  first  day  of  January,  1908,  invest  in  or  loan  upon  any  shares  of  stock 
of  any  corporation,  other  than  a  municipal  corporation ;  nor,  excepting  govern- 
ment, state  or  municipal  securities,  shall  it  invest  in  or  loan  upon,  any  bonds 
or  obligations  not  secured  by  adequate  collateral  security,  and  when  more  than 
one-third  of  the  total  value  of  the  collateral  security  shall  consist  of  shares  of 
stock  it  shall  be  deemed  inadequate.  Every  such  company  possessed  of  stocks 
or  securities  prohibited  by  this  act  shall  dispose  of  the  same  within  five  years, 
unless  such  time  is  extended  by  the  commissioner  of  insurance.  No  investment 
or  loan,  except  policy  loans,  shall  be  made  by  any  such  life  insurance  company 
unless  the  same  shall  first  have  been  authorized  by  the  board  of  directors  or 
by  a  committee  thereof  charged  with  the  duty  of  supervising  such  investment 
or  loan.  No  such  company  shall  subscribe  to  or  participate  in  any  under- 
writing of  the  purchase  or  sale  of  securities  or  property,  or  enter  into  any 
transaction  for  such  purchase  or  sale  on  account  of  said  company  jointly  with 
any  other  person,  firm  or  corporation;  nor  shall  any  such  company  enter  into 
any  agreement  to  withhold  from  sale  any  of  its  property,  but  the,  disposition 
of  its  property  shall  be  at  all  times  within  the  control  of  its  board  of  directors. 
Any  such  company,  in  addition  to  other  investments  allowed  by  law,  may  invest 
any  of  its  funds  and  accumulations  in  the  bonds  of  the  United  States  or  of 
tli is  state  or  of  any  county,  city,  town  or  village  or  duly  organized  school 
district  therein,  or  of  any  municipality  or  civil  division  of  any  state,  and  may 
loan  upon  improved  unincumbered  real  property  in  any  state  fifty  per  centum 
of  the  value  of  such  property,  or  invest  in  the  mortgage  bonds  of  any  dividend 
paying  railway  or  street  railway  company  duly  incorporated  and  organized  under 
the  authority  of  this  state  or  any  other  state,  and  it  may  also  make  loans  on  the 
security  of  promissory  notes  amply  secured  by  pledge  of  any  bonds  in  which 


STATE  OF  NORTH  DAKOTA  19 

such  insurance  companies  are  hereby  authorized  to  invest  their  funds,  and 
may  also  make  loans  upon  the  security  of  its  own  policies,  but  no  loan  on 
any  policy  shall  exceed  the  reserve  value  thereof.     (1907,  Ch.  156,  §  1.) 

§  4862.  Holding  of  Real  Property  Limited.]  Every  such  life  insurance 
company  may  acquire,  hold  and  convey  real  property  only  for  the  following 
purposes  and  in  the  following  manner: 

First.  Such  as  shall  be  requisite  for  the  convenient  accommodation  in  the 
transaction  of  its  business. 

Second.  Such  as  shall  have  been  mortgaged  to  it  in  good  faith  by  way  of 
security  for  loans  previously  contracted  or  for  moneys  due. 

Third.  Such  as  shall  have  been  conveyed  to  it  in  satisfaction  of  debts 
previously  contracted  in  the  course  of  its  dealings. 

Fourth.  Such  as  shall  have  been  purchased  at  sales  on  judgments,  decrees 
or  mortgages  obtained  or  made  for  such  debts. 

All  such  property  specified  in  sub-divisions  two,  three  and  four  of  this  sec- 
tion which  shall  not  be  necessary  for  its  accommodation  in  the  convenient  trans- 
action of  its  buisness,  shall  be  sold  and  disposed  of  within  two  years  after  the 
company  shall  have  acquired  title  to  the  same,  or  within  two  years  after  same 
shall  have  ceased  to  be  necessary  for  the  accommodation  of  its  business;  and 
it  shall  not  hold  such  property  for  a  longer  period  unless  it  shall  procure  a  cer- 
tificate from  the  commissioner  of  insurance  that  its  interests  will  suffer  materi- 
ally by  the  forced  sale  thereof,  in  which  event  the  time  for  sale  may  be  ex- 
tended to  such  time  as  the  commissioner  shall  direct  in  such  certificate.  (1907, 
Ch.  156,  §  2.) 

Article  10 — Provisions  Peculiar  to  Domestic  Stock  Insurance  Com- 
panies. 

§  4863.  Capital  Stock  Required.]  No  stock  company  shall  be  incorpo- 
rated under  this  chapter  unless  it  has  a  capital  stock  of  at  least  $100,000, 
twenty-five  per  cent,  of  which  must  be  paid  in  previous  to  the  issuance  of  any 
policy  and  the  residue  within  twelve  months  from  the  time  of  filing  the  articles 
of  incorporation;  provided,  that  the  commissioner  of  insurance  may  for  good 
cause  shown  extend  the  time  of  payment  of  such  residue  for  the  further  period 
of  not  to  exceed  one  year.  No  fire,  cyclone,  tornado,  hail,  marine,  life,  or 
accident  insurance  company  of  any  other  state,  territory  or  nation  shall  do 
business  in  this  state  unless  it  has  a  paid  up  capital  stock  of  at  least  one  hun- 
dred thousand  dollars  in  available  cash  assets,  over  and  above  all  liabilities 
for  losses  reported,  expenses,  taxes  and  reinsurance  of  all  outstanding  risks. 
(1911,  Ch.  160;  1909,  Ch.  147;  R.  C.  1905,  §  4429.) 

$  4864.  Opening  Book  for  Subscriptions.]  The  individuals  associated 
for  the  purpose  of  organizing  an  insurance  company  under  this  article,  after 
having  filed  the  articles  of  incorporation  as  required  by  section  4837,  may  open 
books  for  subscriptions  to  the  capital  stock  of  such  corporation  and  keep  the 
same  open  until  the  full  amount  specified  in  the  articles  of  incorporation  is 
subscribed.     (R.  C.  1905,  §  4430.) 

§  4865.  Notice  to  Company  When  Capital  Stock  is  Impaired.]  "When- 
ever it  appears  to  the  commissioner  of  insurance  that  the  capital  stock  of  a 
domestic  insurance  company  is  impaired  to  the  extent  of  one-fourth  or  more 
on  the  basis  fixed  in  section  4844  he  shall  notify  the  company  that  its  capital 


20  [NSURANCE   LAWS 

is  Legally  subject  to  be  made  good  in  the  mode  provided  by  section  ixt;<>,  and 
if  such  company  shall  aot  within  three  months  after  such  notice  satisfy  him 
that  it.  lias  fully  repaired  its  capital  or  reduced  its  capital  as  provided  in  sec- 
tion 4867,  he  shall  institute  proceedings  against  it  in  accordance  with  section 
4925.      (R.  C  1905,  §  4431.) 

§  4866.  How  Capital  Made  Good.  Forfeiture  of  Shakes.]  Whenever 
the  net  assets  of  the  company  do  not  amount  to  more  than  three-fourths  of  its 
original  capital,  it  may  make  good  its  original  capital  to  the  original  amount  by 
assessment  of  its  stock.  Shares  on  which  such  an  assessment  is  not  paid  within 
sixty  days  after  demand  shall  be  forfeitable  and  may  be  canceled  by  a  vote  of 
the  directors  and  new  shares  issued  to  make  up  the  deficiency.  If  such  com- 
pany shall  not  within  three  months  after  notice  from  the  commissioner  of 
insurance  to  that  effect  make  good  its  capita!  as  aforesaid,  or  reduce  the  same 
as  allowed  by  the  next  section,  its  authority  to  transact  new  business  of  insur- 
ance shall  cease.     (E.  C.  1905,  §  4432.) 

§  4867.  Capital  Stock  Eeduced.  Examination  and  Certificate  of  Com- 
missioner.] When  the  capital  stock  of  a  company  is  impaired,  such  company 
may  upon  a  vote  of  a  majority  of  the  stock  represented  at  a  meeting  legally 
called  for  that  purpose,  reduce  its  capital  stock  and  the  number  of  shares 
thereof  to  an  amount  not  less  than  the  minimum  sum  required  by  law.  But  no 
part  of  its  assets  and  property  shall  be  distributed  to  its  stockholders.  Within 
ten  days  after  such  meeting  the  company  shall  submit  to  the  insurance  com- 
missioner a  certificate  setting  forth  the  proceedings  thereof  and  the  amount 
of  such  reduction  and  the  assets  and  liabilities  of  the  company,  signed  and 
sworn  to  by  its  president,  secretary  and  a  majority  of  its  directors.  The  com- 
missioner shall  examine  the  facts  in  the  case,  and  if  the  same  conform  t'o  law, 
and  in  his  judgment  the  proposed  reduction  may  be  made  without  prejudice 
to  the  public,  he  shall  indorse  his  approval  upon  the  certificate.  Upon  filing 
the  certificate  so  indorsed  the  company  may  transact  business  upon  the  basis 
of  such  reduced  capital,  as  though  the  same  was  its  original  capital,  and  its 
articles  of  incor] (oration  shall  be  deemed  to  be  amended  to  conform  thereto; 
and  the  commissioner  of  insurance  shall  issue  his  certificate  to  that  effect. 
Such  company  may  by  a  majority  vote  of  its  directors  after  such  reduction 
require  the  return  of  the  original  certificates  of  stock  held  by  each  stockholder 
in  exchange  for  new  certificates  in  lieu  thereof  for  such  number  of  shares  as 
each  stockholder  is  entitled  to  in  the  proportion  that  the  reduced  capital  bears 
to  the  original  capital.     (E.  C.  1905,  §  4433.) 

§  4868.  Capital  Less  Titan  Liabilities.  Notice  Not  to  Issue  Policies.] 
When  the  actual  funds  of  a  domestic  life  insurance  company  exclusive  of  its 
capital,  are  not  of  a  net  cash  value  equal  to  its  liabilities  the  commissioner  of 
insurance  shall  notify  such  company  and  its  agents  to  issue  no  new  policies 
until  its  funds  become  equal  to  its  liabilities.      (E.  C.  1905,  §  4434.) 

§  4869.  Transfer  op  Stuck  Pending  Examination  Does  Not  Release 
Liabilities.].  No  transfer  of  the  stock  of  any  domestic  insurance  company 
made  during  the  pendency  of  any  examination  will  release  the  party  making 
the  transfer  from  his  liability  for  loss  which  may  have  occurred  previous  to 
the  transf.'r.      (E.  C.  1905,  §  4435.) 


STATE  OF  NORTH  DAKOTA  21 

Article  11 — Provisions  Peculiar  to  Domestic  Mutual  Insurance  Com- 
panies. 

§  4870.  Amount  op  Subscribed  Insurance  Required.]  No  policy  shall 
be  issued  by  a  purely  mutual  insurance  company  until  not  less  than  two  hundred 
thousand  dollars  of  insurance  in  not  less  than  one  hundred  separata  risks  have 
been  subscribed  for  and  entered  on  its  books;  but  the  provisions  of  this  section 
shall  not  apply  to  county  mutual  insurance  companies.     (R.  C.  1905,  §  4436.) 

As  to  taking  applications  for  $200,000  of  insurance  before  issuance  of 
policy  in  mutual  societies.  Montgomery  v.  Whitbeck,  12  N.  D.  385,  96  N.  W. 
327. 

§  4871.  Insuked  a  Member.  Notice  op  Meetings.]  Every  person  insured 
by  a  domestic  mutual  insurance  company,  other  than  life,  shall  be  a  membei 
while  his  policy  is  in  force,  entitled  to  one  vote  for  each  policy  he  holds,  and 
shall  be  notified  of  the  time  and  place  of  holding  its  meetings  by  a  written 
notice  or  by  an  imprint  upon  the  back  of  each  policy,  receipt  or  certificate  of 
renewal  as  follows,  to-wit: 

The  assured  is  hereby  notified  that  by  virtue  of  this  policy  he  is  a  member 

of   the mutual  insurance  company,  and  that 

the  annual  meetings  of  such  company  are  held  at  its  home  office  on  the 
day  of in  each  year  at o 'clock. 

The  blanks  shall  be  duly  filled  and  the  same  shall  be  deemed  a  sufficient 
notice.     (R,  C.  1905,  §  4437.) 

§  4872.  Same.]  Every  person  insured  by  a  domestic  mutual  life  insurance 
company  shall  be  a  member  entitled  to  one  vote  and  one  vote  additional  for 
each  five  thousand  dollars  of  insurance  in  excess  of  the  first  five  thousand 
dollars,  anil  shall  be  notified  of  its  annual  meetings  in  the  manner  provided  in 
the  last  section.     (R.  C.  1905,  §  4438.) 

§  4873.  Manner  op  Voting  by  Proxy.]  Members  may  vote  by  proxy 
dated  and  executed  within  three  months  and  returned  and  recorded  on  the  books 
of  the  company  three  days  or  more  before  the  meeting  at  which  they  are  to  be 
used;  but  no  person  shall  be  allowed  as  proxy  or  otherwise  to  cast  more  than 
fifty  votes,  and  no  officer  shall  himself,  or  by  another,  ask  for,  receive,  procure 
to  be  obtained  or  use  a  proxy  vote;  provided,  that  this  section  shall  not  apply 
to  state  mutual  hail  insurance  companies.     (R.  C.  1905,  §  4439.) 

§  4874.  Premium.  Contingent  Liability  Stated  on  Policy.]  Mutual 
insurance  companies  shall  charge  and  collect  upon  their  policies  the  full  mutual 
premium  in  cash  or  notes,  and  may  by  their  bydaws  fix  the  contingent  mutual 
liability  of  its  members  for  the  payment  of  losses  and  expenses  not  provided 
for  by  their  cash  funds;  provided,  that  such  contingent  liability  of  a  member 
shall  not  be  less  than  a  sum  equal  to.  and  in  addition  to  the  cash  premium 
written  in  his  policy;  provided,  further,  that  in  case  said  premium  be  not  so 
paid  in  cash  or  unconditional  notes  within  sixty  days  from  the  date  of  issue, 
the  policy  shall  become  and  be  absolutely  void  and  to  remain  void  during  the 
non-payment  of  such  premium,  and  upon  payment  of  the  premium  as  above 
provided,  such  policy  shall  re-attach;  provided,  there  has  been  no  loss  while 
the  policy  was  void.  The  total  amount  of  the  liability  of  a  policy  holder  shall 
be  clearly  and  legibly  stated  upon  the  back  of  each  policy.  (1907,  Ch.  143; 
R.  C.  1905,  §  4440.)  " 


22  INSURANCE  LAWS 

As  to  validity  of  insurance  contract  made  with  company  which  violated  the 
Btatute.     Walker  v.  Rein,  14  N.  D.  608,  106  N.  W.  405. 

As  to  requirements  that  amount  of  accepted  casli  premium  should  be  writ- 
ten in  policy  of  insurance.  Montgomery  v.  Whitbeck,  12  N.  D.  385,  96  N.  W. 
327. 

§  4875.  Reserve  Fund,  How  Used.]  Any  mutual  insurance  company  may 
at  a  meeting  called  for  that  purpose  provide  for  the  accumulation  of  a  per- 
manent fund  by  reserving  a  portion  of  the  net  profits  to  be  invested  and  be 
a  reserve  for  the  security  of  the  insured.  Such  reservation  shall  not  exceed 
twenty  per  cent,  of  said  net  profits  and  when  the  fund  so  accumulated  amounts 
to  two  per  cent,  of  the  sum  insured  by  all  policies  in  force  the  whole  of  the 
net  profits  shall  be  divided  among  the  insured  at  the  expiration  of  their  policies. 
The  permanent  fund  so  accumulated  shall  be  used  for  the  payment  of  losses 
and  expenses,  whenever  the  cash  funds  of  the  company  in  excess  of  an  amount 
equal  to  its  liabilities  are  exhausted;  and  whenever  the  said  fund  is  drawn 
upon,  reservation  of  profits  as  aforesaid  shall  be  renewed  or  continued  until 
the  limit  of  accumulation  as  herein  provided  is  reached.     (R.  C.  1905,  §  4441.) 

§  4S76.  Temporary  Capital  May  be  Retired.]  A  mutual  life  insurance  com- 
pany may  be  organized  with,  and  an  existing  mutual  life  insurance  company 
may  establish  a  temporary  capital  of  not  less  than  $100,000,  which  shall  be  in- 
vested in  the  same  manner  as  is  provided  for  the  investment  of  its  other  funds. 
Out  of  the  net  surplus  of  the  company  the  holders  of  the  temporary  capital 
stock  may  receive  a  dividend  of  not  more  than  eight  per  cent,  per  annum, 
which  may  be  cumulative.  Such  capital  stock  shall  not  be  a  liability  of  the 
company  except  that  it  shall  be  retired  as  soon  as,  but  not  before  the  surplus 
of  the  company  remaining  after  its  retirement  shall  not  be  less  than  the  tem- 
porary capital  so  established.  At  the  time  for  the  retirement  of  such  capital 
stock  the  holders  shall  be  entitled  to  receive  from  the  company  the  par  value 
thereof  and  any  dividends  thereon  due  and  unpaid,  and  thereupon  the  stock 
shall  be  surrendered  and  canceled,  and  the  right  to  vote  thereon  shall  cease. 
(1907,  Ch.  144.) 

§  4877.  Members  Entitled  to  Share  of  Net  Profits.]  Every  member 
of  a  mutual  insurance  company,  except  a  mutual  life  insurance  company,  when 
his  policy  expires  shall  be  entitled  to  be  paid  in  cash  his  share  of  the  net  profits 
or  surplus  accrued  while  his  policy  was  in  force;  and  shall  in  like  manner  be 
liable  to  pay  his  proportionate  part  of  any  assessments,  which  may  be  laid  by 
the  company  in  accordance  with  law  and  his  contract  on  account  of  losses  and 
expenses  incurred  while  he  was  a  member.     (R.  C.  1905,  §  4442.) 

Liability  of  members  of  mutual  insurance  company.  32  L.   R.   A.  481. 
Jurisdiction  of  equity  to  enforce  liability  of  member  of  mutual  insurance 

company.     40  L.  R.  A.   (N.  S.)   781. 

§  4878.  Distribution  of  Surplus  on  Life  Policies.]  Every  domestic 
mutual  life  insurance  company  shall  annually,  or  once  in  every  two,  three,  four 
or  five  years,  as  it  shall  determine,  and  as  may  be  conditioned  in  its  policies 
make  distribution  of  all  surplus  it  may  have  accumulated  since  its  last  dividend 
of  surplus.  By  such  surplus  is  here  intended  all  accumulations  since  its  last 
distribution  of  surplus  above  its  debts  and  reserve  computed  :is  provided  in 
section  4844.     The  distribution  shall  be  upon  what  is  known  as  the  contribution 


STATE  OF  NOETH  DAKOTA  23 

plan  and  each  member  upon  whose  policy  no  premium  is  overdue  and  unpaid 
shall  be  entitled  to  the  amount  contributed  by  his  policy  to  such  surplus. 
Policies  which  have  become  payable  before  the  time  when  such  distribution  is 
made  and  after  the  date  of  the  last  previous  distribution  shall  share  in  the 
same  equitably  and  proportionally.     (R.  C.  1905,  §  4443.) 

§  4879.  Assessments.  When  and  How  Made.]  Whenever  a  mutual 
insurance  company  other  than  life,  is  not  possessed  of  cash  funds  above  its 
reinsurance  reserve  sufficient  for  the  payment  of  incurred  losses  and  expenses 
it  shall  make  an  assessment  for  the  amount  needed  to  pay  such  losses  and  ex- 
penses upon  its  members  liable  to  assessment  therefor  in  proportion  to  their 
several  liability.  The  company  shall  cause  to  be  recorded  in  a  book  kept  for 
that  purpose  the  order  for  such  assessment  together  with  a  statement  which 
shall  set  forth  the  condition  of  the  company  at  the  date  of  the  order,  the 
amount  of  its  cash  assets  and  of  the  notes  of  its  policy  holders,  or  other  con- 
tingent funds  liable  to  the  assessment,  the  amount  the  assessment  calls  for 
and  the  particular  losses  or  other  liabilities  it  is  made  to  provide  for.  Such 
record  shall  be  made  and  signed  by  the  directors  who  voted  for  the  order  before 
any  part  of  the  assessment  is  collected  and  any  person  liable  to  the  assessment 
may  inspect  and  take  a  copy  of  the  same.     (R.  0.  1905,  §  4444.) 

§  4880.  Making  Premium  Reserve  Good.  Single  Assessment.  Can- 
cellation of  Policies.  Double  Assessments.  Reinsurance.]  When  by 
reason  of  depreciation  or  loss  of  funds,  or  otherwise,  the  cash  assets  of  such 
a  company  after  providing  for  its  other  debts  are  less  than  the  required  pre- 
mium reserve  upon  its  policies  it  shall  make  good  the  deficiency  by  assessment 
in  the  mode  provided  in  the  last  section;  or,  if  the  directors  are  of  the  opinion 
that  the  company  is  likely  to  become  insolvent  they  may,  instead  of  such  assess- 
ment, make  two  assessments,  the  first  determining  what  each  policy  holder 
must  equitably  pay  or  receive  in  case  of  withdrawal  from  the  company  and 
having  his  policy  canceled,  the  second  what  further  sum  each  must  pay  in  order 
to  reinsure  the  unexpired  term  of  his  policy  at  the  same  rate  as  the  whole  was 
insured  at  first.  Each  policy  holder  shall  pay  or  receive  according  to  the  first 
assessment  and  his  policy  shall  then  be  canceled,  unless  he  pays  the  further  sum 
determined  by  the  second  assessment,  in  which  ease  his  policy  shall  continue 
in  force;  but  in  neither  case  shall  a  policy  holder  receive  or  have  credited  to 
him  more  than  he  would  have  received  on  having  his  policy  canceled  hy  a  vote 
of  the  directors  under  the  by-laws.  If  within  two  months  After  such  alternative 
assessments  have  become  collectible  the  amount  of  the  policies  whose  holders 
have  settled  for  both  assessments  is  less  than  two  hundred  thousand  dollars. 
the  company  shall  cease  to  issue  policies;  and  all  policies  whose  holders  have 
not  settled  for  both  assessments  shall  be  void  and  the  company  shall  con- 
tinue only  for  the  purpose  of  adjusting  the  deficiency  or  excess  of  premiums 
among  the  members  and  settling  outstanding  claims.  No  assessment  shall  be 
valid  against  a  person  who  has  not  been  duly  notified  thereof,  within  two  years 
after  the  expiration  or  cancellation  of  his  policy.     (R.  0.  1905,  $  4145. "i 

§  4881.  Directors  Personally  Liable  for  Not  Making  and  Collecting 
Assessments.]  Tf  the  directors  of  any  mutual  insurance  company  shall 
neglect  or  omit  for  the  space  of  six  months  to  lay  and  use  reasonable  diligence 
to  collect  any  assessment   they   are   required  to  make,  they  shall  be  personally 


24  INSURANCE  LAWS 

liable  for  all  debts  ami  claims  then  outstanding  against  the  company,  or  that 
may  accrue  until  such  assessment  is  laid  and  put  in  process  of  collection.  If 
tlic  treasurer  of  such  company  unreasonably  neglects  to  collect  an  assessment 
made  by  order  of  the  directors  and  to  apply  the  same  to  the  payment  of  the 
claims  for  which  it  was  made,  he  shall  be  personally  liable  to  the  party  having 
such  claims  for  the  amount  of  the  assessment;  and  he  may  repay  himself  out 
of  any  money  afterwards  received  for  the  company  on  account  of  said  assess- 
ment.    (R,  C.  1905,  §  4446.) 

Article  12 — Surplus  of  Life  Insurance  Company. 

§  4882.  Surplus  Apportioned  Annually.]  Every  life  insurance  com- 
pany doing  business  in  this  state  conducted  on  the  mutual  plan  or  in  which 
policy  holders  are  entitled  to  share  in  the  profits  or  in  which  policy  holders  of 
life  insurance  heretofore  issued,  under  the  conditions  of  which  the  distribution 
of  surplus  is  deferred  to  a  fixed  or  specified  time  and  contingent  upon  the 
policy  being  in  force  and  the  insured  living  at  that  time  annually  ascertain  the 
amount  of  surplus  to  which  all  such  policies  as  a  separate  class  are  entitled, 
and  shall  apportion  to  such  policies  as  a  class  the  amount  of  surplus  so  ascer- 
tained and  carry  the  amount  of  such  apportioned  surplus,  plus  the  actual 
interest  earnings  and  accretions  of  such  fund,  as  a  distinct  and  separate  lia- 
bility to  such  class  of  policies  on  and  for  which  the  same  was  accumulated, 
and  no  company  or  any  of  its  officers  shall  be  permitted  to  use  any  part  of  such 
apportioned  surplus  fund  for  any  purpose  whatsoever  other  than  for  the  ex- 
press purpose  for  which  the  same  was  accumulated.  (1909,  Ch.  145,  Par.  1; 
1907,  Ch.  142.  Par.  1.) 

§  1883.  Exception.]  The  preceding  section  shall  not  apply  to  industrial 
policies.     (1909,  Ch.  145,  Par.  2.) 

§  4884.  Contingency  Reserve.]  Any  life  insurance  company  doing  business 
in  this  state  may  accumulate  and  maintain  in  addition  to  the  capital  and  surplus 
contributed  by  its  stockholders  and  in  addition  to  an  amount  equal  to  the  net 
values  of  its  policies,  computed  according  to  the  laws  of  the  jurisdiction  under 
which  it  is  organized,  a  contingency  reserve  not  exceeding  the  following  respec- 
tive percentages  of  said  net  values,  to-wit:  When  said  net  values  are  less 
than  one  hundred  thousand  dollars,  twenty  per  centum  thereof  or  the  sum  of 
ten  thousand  dollars,  whichever  is  the  greater;  when  said  net  values  are  greater 
than  one  hundred  thousand  dollars,  the  percentage  thereof  measuring  the  con- 
tingency reserve  shall  decrease  one-half  of  one  per  centum  for  each  one  hun- 
dred thousand  dollars  of  said  net  values  up  to  one  million  dollars;  one-half  of 
one  per  centum  for  each  additional  one  million  dollars  up  to  ten  million  dollars: 
one  half  of  one  per  centum  for  each  additional  two  million  five  hundred  thou- 
sand dollars  up  to  twenty  million  dollars;  one-half  of  one  per  centum  for  each 
additional  five  million  dollars  up  to  fifty  million  dollars;  one  half  of  one  per 
centum  for  each  additional  twenty  five  million  dollars  up  to  seventy-five  mil- 
lion dollars;  and  if  said  net  values  equal  or  exceed  the  past  mentioned  amount 
the  contingency  reserve  shall  not  exceed  five  per  centum  thereof;  provided, 
that  as  the  net  values  of  said  policies  increase  and  the  maximum  percentage 
measuring  the  contingency  reserve  decreases  such  corporation  may  maintain 
the  contingency  reserve  already  accumulated  hereunder,  although  for  the  time 
being  it  may  exceed  the  maximum  percentage  herein  prescribed,  but  may  not 


STATE  OF  NORTH  DAKOTA  25 

add  to  the  contingency  reserve  when  the  addition  will  bring  it  beyond  the  maxi- 
mum percentage;  provided,  further,  that  for  cause  shown  the  commissioner  of 
insurance  may  at  any  time  from  time  to  time  permit  any  corporation  to 
accumulate  and  maintain  a  contingency  reserve  in  excess  of  the  limit  above 
mentioned  for  a  prescribed  period,  not  exceeding  one  year  under  any  one  per- 
mission, by  filing  in  his  office  a  decision  stating  his  reasons  therefor  and  caus- 
ing the  same  to  be  published  in  his  next  annual  report.  This  section  shall  not 
apply  to  any  company  doing  exclusively  a  non-participating  business.  (1907, 
Oh.  142,  Par.  2.) 

§  4885.  Eights  op  Policy  Holders.]  Every  policy  holder  shall  on  all 
participating  policies  hereafter  issued  be  permitted  annually  to  select  the  man- 
ner and  method  of  the  application  of  the  surplus  to  be  annually  apportioned 
to  his  policy  from  among  those  set  forth  in  the  policy.  All  apportioned  surplus 
not  actually  paid  over  to  the  insured,  or  applied  in  the  reduction  of  current 
or  future  premiums  or  in  the  purchase  of  paid-up  insurance  or  pure  endowment 
additions,  shall  be  credited  to  the  assured  and  carried  as  an  actual  liability  and 
be  paid  at  the  maturity  of  the  policy.     (1907,  Ch.  142,  Par.  3.) 

§  4886.  Automatic  Insurance.]  In  event  of  default  in  payment  of  any 
premium  due  on  any  policy,  provided  not  less  than  three  full  years'  premiums 
shall  have  been  paid,  there  shall  be  secured  to  the  insured  without  action  on 
his  part,  either  paid-up  or  extended  insurance  as  specified  in  the  policy,  the 
net  value  of  which  shall  be  at  least  equal  to  the  entire  net  reserve  held  by  the 
company  on  such  policy  less  two  and  one-half  per  centum  of  the  amount  insured 
by  the  policy  and  dividend  additions,  if  any,  and  less  any  outstanding  indelt- 
edness  to  the  company  on  the  policy  at  the  time  of  default.  There  shall  be 
secured  to  the  insured  the  right  to  surrender  the  policy  to  the  eompany  at  its 
home  office  within  one  month  after  date  of  default  for  the  cash  value  other- 
wise available  for  the  purchase  of  the  paid-up  or  extended  insurance  as  afore- 
said.    (1907,  Ch.  142,  Par.  4.) 

§  4887.  Contra  Agreement  Forbidden.]  No  agreement  between  the  com- 
pany and  the  policy  holder  or  applicant  for  insurance  shall  be  held  to  waive 
any  of  the  provisions  of  this  act.     (1907,  Ch.  142,  Par.  5.) 

Article  13 — Consolidation  and  Reinsurance  of  Domestic  Insurance  Com- 
panies. 

§  4888.  Consolidation  Forbidden.]  No  company  organized  under  the 
laws  of  this  state  to  do  business  of  life,  accident  or  health  insurance,  either  on 
the  stock,  mutual,  stipulated  premium,  assessment,  or  fraternal  plan,  shall 
consolidate  with  any  other  company,  or  reinsure  its  risks,  or  any  part  thereof 
with  any  other  company,  or  assume  or  reinsure  the  whole  of  or  any  portion  of 
the  risks  of  any  other  company,  except  as  hereinafter  provided,  but  nothing 
lu-rcin  contained  shall  prevent  any  such  company,  organized  on  the  stock  or 
mutual  plan,  from  reinsuring  a  fractional  part  of  any  risk.  (1907,  Ch.  150, 
Par.  1.) 

Right  of  corporations  to  consolidate.     52  L.  R.  A.  369. 

§  4889.  Petition  for  Consolidation.]  When  any  such  company  shall 
propose  to  consolidate  with  any  other  company,  or  to  enter  into  any  contract 
of  reinsurance,  it  shall  present  its  petition  to_  the  insurance  commissioner  of 
this  state,  setting  forth  the  terms  and  conditions  of  such   proposed  eonsolida- 


26  [NSUEANCE  LAWS 

tion  or  reinsurance,  and  asking  for  the  approval  or  of  any  modification  thereof, 
which  the  commission  hereinafter  provided  for  may  approve.  (1907,  Ch.  150, 
Par.  2.) 

§  4890.  Duty  op  Insurance  Commissioner.]  The  insurance  commissioner 
thereupon  shall  issue  an  order  of  notice  requiring  notice  to  be  given  by  mail 
to  each  policy  holder  of  such  company,  of  the  pending  of  such  petition,  and 
the  time  and  place  at  which  hearing  thereon  will  be  held,  and  shall  publish 
the  said  order  of  notice  and  said  petition  in  five  newspapers  for  at  least  two 
weeks  before  the  time  appointed  for  the  hearing  upon  said  petition,  and  in  one 
daily  newspaper  published  at  the  capital  of  the  state.     (1907,  Ch.  150,  Par.  3.) 

§  4891.  Commission.]  The  governor,  or  in  the  event  of  his  inability  to 
act,  some  competent  person  resident  of  the  state  to  be  appointed  by  him,  the 
attorney  general  and  the  insurance  commissioner  of  this  state,  shall  constitute 
a  commission  to  hear  and  determine  upon  said  petition.  At  the  time  and  place 
fixed  in  said  notice  or  at  such  time  and  place  as  shall  be  fixed  by  adjournment, 
the  said  commission  shall  proceed  with  the  hearing  and  may  make  or  order 
such  examination  into  the  affairs  and  condition  of  such  company  as  it  may 
deem  proper.  The  insurance  commissioner  shall  have  the  power  to  summon  and 
compel  the  attendance  and  testimony  of  witnesses  and  production  of  books 
and  papers  before  said  commission.  Any  policy  holder  or  stockholder  of  the 
company  or  companies  so  petitioning  may  appear  before  said  commission  and 
be  heard  in  reference  to  said  consolidation  or  reinsurance.  Said  commission  if 
satisfied  that  the  interests  of  the  policy  holders  of  such  company  or  companies 
are  properly  protected,  and  that  no  reasonable  objection  exists  thereto,  may 
approve  and  authorize  the  proposed  consolidation  or  reinsurance  or  may  modify 
or  change  the  terms  and  conditions  thereof  as  may  seem  best  for  the  interests 
of  the  policy  holders,  and  said  commission  may  make  such  order  with  reference 
to  the  distribution  and  disposition  of  the  surplus  assets  of  any  such  company 
thereafter  remaining  as  shall  be  just  and  equitable  to  the  policy  holders. 
Such  consolidation  or  reinsurance  shall  only  be  approved  by  the  consent  of 
all  members  of  such  commission,  and  it  shall  be  the  duty  of  said  commission 
to  safeguard  the  interests  of  the  "policy  holders  of  any  such  company  or  com- 
panies proposing  to  consolidate  or  reinsure.     (1907,  Ch.  150,  Par.  4.) 

§  4892.  Expenses  Paid.]  All  actual  expenses  and  costs  incident  to  pro- 
ceedings under  the  provisions  of  this  act  shall  be  paid  by  the  company  or  com- 
panies bringing  said  petition,  and  an  itemized  statement  of  the  expenses  and 
costs  shall  be  filed  with  the  insurance  commissioner  with  a  certified  copy  of 
the  decision  of  the  commission.  No  officer  of  any  such  company  or  companies, 
nor  members  of  said  commission,  or  employee  of  the  state,  shall  receive  any 
compensation,  gratuity  or  otherwise,  directly  or  indirectly,  for  in  any  manner 
aiding,  promoting  or  assisting  in  such  consolidation  or  reinsurance.  (1907, 
Ch.  150,  Par.  5.) 

§  4893.  Penalty  for  Violation.]  Any  officers,  director  or  stockholder  of 
any  such  company  or  companies,  or  any  member  of  such  commission  or  em- 
ployee of  the  state,  violating  or  consenting  to  the  violation  of  the  provisions 
of  this  act  shall  be  punished  by  a  fine  not  less  than  five  thousand  dollars  or 
imprisonment  in  the  county  jail  for  not  less  than  one  year,  or  both  such  fine 
and  imprisonment,  in  the  discretion  of  the  court.      (1907,  Ch.  150,  Par.  6.) 


STATE  OF  NORTH  DAKOTA  27 

Article  14 — Provisions  Peculiar  to  Mutual  Hail  Insurance  Companies. 

§  4894.  Foreign  Mutuals  Prohibited.  Contracts  Void.  Penalty.]  No 
foreign  insurance  company  incorporated  upon  the  mutual  plan  shall  directly 
or  indirectly,  take  any  hail  risk,  or  transact  the  business  of  hail  insurance  in 
this  state.  All  contracts,  notes,  mortgages  and  other  evidence  of  indebtedness 
made  or  taken  in  violation  of  this  section  are  hereby  declared  void.  (P.  C. 
1905,  §  4447.) 

§  4895.  Penalty.]  Any  person  who  violates  any  of  the  provisions  of 
section  4894  or  who  procures  or  induces  another  to  do  so  is  guilty  of  a  misde- 
meanor.    (R    C.  1905,  §  4448.) 

§  4896.  Mutual  Insurance  Companies  (Engage)  Engaged  in  II  mi 
Business,  When.]  No  mutual  insurance  company  hereafter  organized  under 
the  laws  of  this  state  shall  engage  in  the  business  of  hail  insurance  in  this 
state  without  first  filing  a  bond  in  the  office  of  the  commissioner  of  insurance 
in  the  sum  of  twenty-five  thousand  dollars  ($25,000.00),  said  bond  to  be  satis- 
factory in  form  and  surety  to  the  commissioner  of  insurance,  and  no  mutual 
hail  insurance  company  now  or  hereafter  organized  under  the  laws  of  any  other 
state  or  county  shall  be  admitted  to  engage  in  the  business  of  hail  insurance  in 
this  state  without  having  net  cash  assets  in  the  sum  of  one  hundred  thousand  dol- 
lars ($100,000.00)  above  its  liabilities  and  without  first  depositing  and  thereafter 
keeping  on  deposit  with  the  treasurer  of  this  state  the  sum  of  twenty-five  thou- 
sand dollars  ($25,000.00)  in  money,  or  first  mortgage  loans  on  real  estate  in 
the  State  of  North  Dakota  or  certificates  of  deposit  issued  by  banks  in  North 
Dakota,  both  mortgage  and  certificate  to  be  approved  by  the  commissioner  of 
insurance;  said  mortgages  or  deposits  to  be  of  the  face  value  of  twenty-five 
thousand  dollars  ($25,000.00),  the  said  bond  and  said  deposit  conditioned  for 
the  carrying  of  its  contracts  and  obligations  incurred  by  its  policies.  (Chap. 
109,  L.  1915.) 

§  4897.  Duties  of  State  Treasurer.]  Said  money  or  securities  so  deposited 
shall  be  and  remain  in  the  hands  of  the  treasurer  of  this  state  as  a  fund  to 
secure  the  payment  of  all  losses  occurring  under  all  policies  or  contracts  for 
hail  insurance,  made  by  such  company  in  this  state,  or  covering  property  situ- 
ated within  the  state.  And  the  treasurer  of  this  state  shall  not  permit  said 
deposit  or  any  part  thereof  to  be  withdrawn  by  said  company  from  his  custody 
except  as  hereinafter  provided.     (R.  C.  1905,  §  4450.) 

§  4898.  Penalty.]  If  any  such  company  hereafter  organized  under  the 
laws  of  this  state  shall  violate  any  of  the  provisions  of  this  article,  the  charter 
of  said  company  or  association  shall  thereupon  be  forfeited  and  it  shall  lie  the 
duty  of  the  attorney  general,  on  complaint  of  the  commissioner  of  insurance. 
to  take  all  legal  proceedings  necessary  to  have  such  forfeiture  enforced  and 
such  company  dissolved  and  its  affairs  wound  up.     (R.  C.  1905,  §  4451.) 

$  4899.  Relinquish  Business,  How.]  When  any  such  company  or  cor- 
poration, having  made  the  deposit  as  herein  provided,  desires  to  relinquish  the 
transaction  of  the  business  of  hail  insurance  in  this  state  and  withdraw  such 
deposit,  and  shall  file  with  the  commissioner  of  insurance  an  application,  under 
the  oath  of  its  officers,  stating  that  all  its  liabilities  arising  under  the  contracts 
or  policies  above  mentioned  are  paid,  the  commissioner  of  insurance  shall  there- 
upon publish  notice  of  such  application  in  a  newspaper  published  at  the  capital 


28  INSURANCE  LAWS 

of  the  state,  twice  a  week  for  a  period  of  three  mouths,  and  after  such  publi- 
cation, on  his  being  satisfied  by  the  exhibition  of  the  books  and  papers  of  such 
company,  and  on  examination  by  himself  or  a  person  appointed  by  him,  that 
all  liabilities  under  the  policies  or  contracts  herein  mentioned  have  been  fully 
paid  and  extinguished,  the  commissioner  of  insurance  shall  thereupon  file  a 
certificate  to  that  effect  with  the  treasurer  of  this  state,  who  shall  thereupon 
deliver  such  deposit  to  said  company,  or  its  assigns.-  If  it  shall  appear  from 
such  application  and  examination  that  all  the  liabilities  of  such  company  have 
nut  been  paid  and  extinguished,  and  that  the  amount  of  such  deposit  is  more 
than  equal  to  twice  the  amount  of  such  remaining  liabilities,  the  treasurer  shall 
thereupon  pay  to  such  company,  or  its  assigns,  a  part  of  such  deposit,  retaining 
an  amount  equal  to  twice  the  amount  of  the  liabilities  so  remaining.  (R.  C. 
1905,  §  4452.) 

§  4900.  Companies  Collect  Interest.]  So  long  as  any  deposit  required  by 
this  article  is  kept  good,  and  the  depositing  company  is  solvent,  the  state 
treasurer  may  permit  the  company  to  collect  the  interest  on  the  securities  so 
deposited,  and  from  time  to  time  to  withdraw  any  such  securities  on  depositing 
with  him  others  of  the  value  and  character  required  by  this  article.  (R.  C. 
1905,  §  4453.) 

§  4901.  Proceedings,  Who  Institute.]  Any  insurance  company  which 
has  made  such  deposit,  or  the  commissioner  of  insurance  in  the  name  of  the 
state,  or  any  person  entitled  to  the  benefit  of  such  deposit,  may  at  any  time 
institute  in  the  district  court  of  Burleigh  county  legal  proceedings  against  this 
state  and  other  parties  properly  joined  therein  to  enforce,  administer  or 
terminate  the  trust  created  by  such  deposit.  The  process  in  such  suits  shall 
be  served  upon  the  insurance  commissioner  of  this  state,  who  shall  appear  ami 
answer  in  its  behalf,  and  he  and  the  treasurer  of  this  state  shall  perform  such 
orders  and  decrees  as  the  court  may  make  therein.     (R.  C.  1905,  §  4454.) 

Article  15. — Time  When  Hail  Insurance  Policies  Take  Effect. 

§  4902.  Twenty-four  Hours  After  Application  Taken.]  Every  insur- 
ance company  engaged  in  the  business  of  insuring  against  loss  by  hail  in  this 
state,  shall  be  bound,  and  the  insurance  shall  take  effect  from  and  after  twenty- 
four  hours  from  the  day  and  hour  the  application  for  such  insurance  has  been 
taken  by  the  authorized  local  agent  of  said  company,  and  if  the  company  shall 
decline  to  write  the  insurance  upon  receipt  of  the  application,  it  shall  forth- 
with notify  the  applicant  and  agent  who  took  the  application,  by  telegram, 
and  in  that  event,  the  insurance  shall  not  become  effective.  Provided,  that 
nothing  in  this  act  shall  prevent  the  company  from  issuing  a  policy  on  such 
application  and  putting  the  insurance  in  force  prior  to  the  expiration  of  said 
twenty-four  hours.     (1907,  Ch.  177,  Par.  1.) 

§  4903.  No  provision  herein,  however,  shall  apply  to  the  State  Hail  Insur- 
ance Department.     (1907,  Ch.  177,  Par.  2.) 

Article  16 — Provisions  Peottliae  to  Fidelity  Insurance  Companies. 

§  4904.  Fidelity  Insurance  and  Corporate  Suretyship.  Sole  Surety.] 
Any  corporation  organized  under  the  laws  of  the  State  of  North  Dakota,  or  of 
any  state  of  the  United  States,  or  of  any  foreign  country,  to  transact  the  busi- 
ness of  fidelity  insurance  .-mil  corporate  suretyship,  and  authorized  to  do  busi- 


STATE  OF  NORTH  DAKOTA  29 

ness  in  this  state,  as  hereinafter  provided,  may  make  contracts  of  insurance  to 
guarantee  the  fidelity  of  persons  holding  positions  of  trust  in  private  or  public 
employment  or  responsibility,  and  may,  if  accepted  and  approved  by  the  court, 
magistrate,  obligee  or  person  competent  to  approve  Buch  bond  act  as  surety 
upon  the  official  bond  or  undertaking  of  any  person  or  corporation,  to  the 
United  States,  to  the  State  of  North  Dakota,  or  to  any  county,  city,  town, 
school  district,  court,  judge,  magistrate  or  public  officer,  or  to  any  corporation 
or  association,  public  or  private;  and  may  also  act  as  surety  upon  any  bond 
or  undertaking  to  any  person  or  corporation  conditioned  upon  the  performance 
of  any  duty  or  trust,  or  for  the  doing  or  not  doing  of  anything  in  such  bond 
specified,  and  to  indemnify  against  loss  any  person  who  is  responsible  as  surety 
upon  a  written  instrument  or  otherwise,  for  the  performance  of  the  officers  of 
any  office,  employment,  contract  or  trust.  When  by  law  two  or  more  sureties 
are  required  upon  any  obligation,  any  corporation  qualified  as  herein  provided 
is  authorized  to  insure,  and  it  may  act  as  sole  surety  thereon,  and  may  be 
accepted  as  such  by  the  court,  magistrate  or  other  officer  or  person  authorized 
to  approve  of  the  sufficiency  of  such  bond  or  undertaking.  (E.  C.  1905,  §  4455.) 
Certificate  of  corporation's  authority   to   execute  surety  bond   need  not 

be  annexed  to  undertaking.     Oermantown  Trust  Co.  v.  Whitney,  S.  D.  108, 

102  N.  W.  .304. 

§  4905.  Acceptance  of  Such  Bond.]  Whenever  any  bond,  undertaking, 
recognizance  or  other  obligation  is,  by  law,  or  the  charter,  ordinance,  rules  or 
regulations  of  any  municipality,  board,  body,  organization,  court,  judge,  or 
public  officer,  required  or  permitted  to  be  made,  given,  tendered  or  filed  with 
any  surety  or  sureties,  and  whenever  the  performance  of  any  act,  duty  or 
obligation  or  the  refraining  from  any  act,  is  required  or  permitted  to  be 
guaranteed,  such  bond,  undertaking,  obligation,  recognizance  or  guaranty  may 
be  executed  by  a  surety  company,  qualified  under  this  chapter;  provided,  that 
such  execution  by  such  company  of  such  bond,  undertaking,  obligation,  re- 
cognizance or  guaranty,  shall  be  in  all  respects  a  full  and  complete  compliance 
with  every  requirement  of  every  lav.-,  charter,  ordinance,  rule  or  regulation  and 
such  bond  shall  be  valid  and  shall  be  accepted  notwithstanding  any  requirement 
of  law  that  such  bond,  undertaking,  obligation,  recognizance  or  guaranty  shall 
be  executed  by  one  or  more  sureties,  or  that  such  sureties  shall  be  residents  or 
householders  or  freeholders,  or  either  or  both,  or  possess  any  other  qualifica- 
tions, and  all  courts,  judges,  heads  of  departments,  boards,  bodies,  munici- 
palities and  public  officers  of  every  character,  shall  accept  and  treat  such 
bond,  undertaking,  obligation,  recognizance  or  guaranty  when  so  executed  by 
such  company,  as  conforming  to  and  fully  and  completely  complying  with 
every  such  requirement,  ami  every  such  law,  charter,  ordinance,  rule  or  regula- 
tion.    (R.  C.  1905.  §  4456.) 

Board  of  railroad  commissioners  may  examine  into  sufficiency  of  bonds 

given  by  grain   elevator  operator  and    may   for  such   purpose   summon    any 

witness   before    them    that    they    please.      State    e\    rel    Dakota    Trust    Co.   v. 

Stutsman.  24  N.  D.  68,  139  N.  W.  S.-'.. 

§  4906.  Expense  cot  Bond,  ITov;  Paid.]  Any  receiver,  assignee,  guardian, 
trustee,  committee,  executor,  administrator  or  other  fiduciary  required  by  law 
or  ordered  by  any  court  or  judge  to  give  a  bond  or  other  obligation  as  such. 


30  INSURANCE  LAWS 

may  include  as  a  part  of  the  lawful  expense  of  executing  his  trust,  such  reason- 
able sum  paid  to  a  corporation  authorized  under  the  laws  of  this  state  so  to 
do,  for  acting  as  surety  on  such  bond,  as  may  be  allowed  by  the  court  in  which 
the  judge  before  whom  he  is  required  to  account,  not  exceeding  one  per  cent, 
per  annum,  or  fraction  thereof,  on  the  amount  of  such  bond,  and  in  all  actions 
and  proceedings  a  party  entitled  to  recover  disbursements  therein  shall  be 
allowed,  and  may  tax  and  recover  such  sum  paid  such  corporation  for  executing 
any  bond,  recognizance  or  undertaking  therein,  not  less  than  five  dollars,  nor 
more  than  one  per  cent,  per  year,  or  fraction  thereof,  on  the  amount  of  the 
penalty  or  liability  in  such  bond,  recognizance  or  undertaking  specified,  while 
the  same  has  been  in  force.     (R.  C.  1905,  §  4457.) 

§  4907.  Must  Comply  With  Laws  of  State.]  Every  corporation  not 
organized  under  the  laws  of  the  State  of  North  Dakota,  to  be  qualified  to  act 
as  surety  or  guarantor,  must  comply  with  the  requirements  of  every  law  of  this 
state  applicable  to  such  company,  and  to  foreign  insurance  companies  doing 
business,  thereunder;  must  be  authorized  under  the  laws  of  the  state  wherein 
incorporated,  and  under  its  charter  to  be  surety  upon  such  bond,  undertaking, 
recognizance  or  obligation,  must  have  fully  paid  up  and  safely  invested  an 
unimpaired  capital  of  at  least  two  hundred  thousand  dollars;  must  have  good 
and  available  assets  exceeding  its  liabilities,  which  liabilities  for  the  purpose 
of  this  article,  shall  be  taken  to  be  its  capital  stock,  debts  outstanding,  and  a 
premium  reserve  at  the  rate  of  fifty  per  centum  of  the  current  annual  premiums 
on  each  outstanding  bond  or  obligation  of  like  character  in  force;  must  file 
with  the  commissioner  of  insurance  a  certified  copy  of  its  certificate  of  incoiv 
poration,  a  written  application  to  be  authorized  *to  do  business  in  this  state, 
also  with  such  application,  and  in  each  year  thereafter,  a  statement,  verified 
under  oath,  made  up  to  December  thirty-first  preceding,  stating  the  amount 
of  its  paid  up  cash  capital,  particularizing  each  item  of  investment,  the  amount 
of  premiums  upon  existing  bonds,  undertakings  and  obligations  of  like  char- 
acter in  force  upon  which  it  is  surety,  the  amount  of  liability  for  unearned 
portion  thereof,  estimated  at  the  rate  of  fifty  per  centum  of  the  current  annual 
premiums  on  such  bond,  undertaking,  recognizance  and  obligation  in  force, 
stating  also  the  amount  of  debts  outstanding,  obligations  of  all  kinds,  and  such 
further  facts  as  may  be  by  the  laws  of  this  state  required  of  such  company 
in  transacting  business  therein;  and  if  such  company  be  organized  under  the 
laws  of  any  other  state  than  this  state,  it  must  have  on  deposit  with  a  state 
officer  of  one  of  the  states  of  the  United  States  not  less  than  one  hundred 
thousand  dollars  in  securities  prescribed  by  law,  deposited  with  and  held  by 
such  officer  for  the  benefit  of  the  holders  of  its  obligations.  It  must  also,  by 
a  duly  executed  instrument,  filed  in  his  office,  constitute  and  appoint  the  com- 
missioner of  insurance  of  this  state  and  his  successors,  its  true  and  lawful 
attorney,  upon  whom  all  process  in  any  action  or  proceeding  against  it  may 
be  served,  and  therein  must  agree  that  any  process  which  may  be  served  upon 
its  attorney  shall  be  of  the  same  force  and  validity  as  if  served  upon  the  cor- 
poration, and  tli.it  the  authority  thereof  shall  continue  in  force  irrevocable, 
so  long  as  any  liability  of  the  company  remains  outstanding  in  this  state. 
Service  upon  such  attorney  shall  be  deemed  sufficient  service  upon  the  corpora- 
tion.    (R.  C.  1905,  §  4458.) 


STATE  OF  NORTH  DAKOTA  31 

$  4908.  Domestic  Surety  Companies.]  Every  corporation  organized 
under  the  laws  of  this  state,  and  for  the  purpose  in  whole  or  in  part  of  trans- 
acting the  business  of  fidelity  or  corporate  suretyship,  must  comply  with  the 
provisions  of  chapter  31  of  the  civil  code  and  section  4929,  and  upon  such 
corporation  filing  in  the  office  of  the  commissioner  of  insurance  a  certificate 
issued  by  the  state  treasurer,  to  the  effect  that  such  corporation  has  complied 
with  the  provisions  of  section  5207,  together  with  a  certified  copy  of  its  articles 
of  incorporation,  and  the  payment  of  the  proper  fees  therefor,  the  commissioner 
of  insurance  shall  issue  to  such  corporation  a  certificate,  and  shall  issue  to  its 
agents  certificates  as  provided  in  section  4920,  which  certificate  shall  be  issued 
yearly  on  the  filing  by  such  corporation  of  a  statement  of  its  condition  as  of 
December  thirty-first  of  the  year  last  ending.     (E.  C.  1905,  §  4459.) 

Board  of  railroad  commissioners  may  examine  into  sufficiency  of  bonds 

given  by   grain  elevator  operator  and  may  for  such  purpose  summon  any 

witness  before  them  that  they  please.     State  ex  rel.  Dakota  Trust  Co.  v. 

Stutsman,  24  N.  D.  G8,  139  N.  W.  83. 

§  4909.  Concurrent  Undertakings.]  Whenever  any  bond,  undertaking 
or  other  obligation  is  by  law,  or  the  charter,  ordinances,  rules  and  regulations 
of  any  municipality,  board,  body,  organization,  court  or  public  officer,  required 
or  permitted  to  be  made,  given  or  filed  as  hereinbefore  provided,  and  whenever 
the  amount  thereof  is  fixed  by  law  or  by  the  charter,  ordinances,  rules  or  regu- 
lations of  any  municipality,  board,  body,  organization,  court,  judge  or  public 
officer,  then  two  or  more  such  bonds  executed  by  corporations  qualified  under 
the  laws  of  this  state,  and  aggregating  the  amount  so  fixed  or  determined, 
may  be  accepted  and  shall  be  in  all  things  treated  as  one  bond  or  obligation, 
and  in  case  of  loss  or  liability  thereunder,  the  amount  of  such  loss  or  liability, 
chargeable  against  each  such  bond  or  undertaking,  shall  be  the  same  proportion 
of  the  entire  loss  or  liability,  as  such  bond  or  obligation  bears  to  the  aggre- 
gate amount  of  the  penalty  or  liability  specified  in  all  of  such  bonds,  whether 
such  proportion  be  stated  therein  or  not.     (R.  C.  1905,  §  4460.) 

§  4910.  Relief  from  Liability.]  The  surety,  or  the  representative  of  any 
surety  upon  a  bond  of  any  officer  or  fiduciary,  may  apply  by  petition  to  the 
court  wherein  said  bond  is  directed  to  be  filed  or  which  may  have  jurisdiction 
of  the  beneficiary  thereunder,  praying  to  be  relieved  from  further  liability 
thereon,  and  to  require  said  officer  or  fiduciary  to  show  cause  why  he  should 
not  account  and  said  surety  be  relieved  from  such  further  liability  as  aforesaid. 
and  the  said  principal  be  required  to  give  a  new  bond,  and  thereupon  and  upon 
the  filing  of  said  petition,  said  court  shall  issue  an  order  returnable  at  such 
time  and  place,  and  to  be  served  in  such  manner  as  said  court  shall  direct, 
and  may  restrain  such  officer  or  fiduciary  from  acting  except  in  such  manner 
as  it  may  direct  therein,  to  preserve  the  trust  estate,  and  upon  the  return  of 
such  order  to  show  cause,  if  the  principal  in  the  bond  account  in  due  form  of 
law  and  file  a  new  bond,  duly  approved;  then  said  court  must  make  an  order 
releasing  said  surety  filing  the  petition  aforesaid  from  further  liability  upon 
the  bond  for  any  subsequent  act  or  default  of  the  principal,  and  in  default 
of  said  principal  this  accounting  and  filing  said  new  bond,  the  said  court  shall 
make  an  order  directing  such  officer  and  fiduciary  to  account  in  due  form  of 
law  within  thirty  days,  and  that  if  the  trust  fund  or  estate  shall  be  found  or 


3<J  [NSUEANCB  LAWS 

made  good,  or  properly  secured  in  the  manner  directed  by  the  court,  such  com- 
pany  shall  be  discharged  from  any  and  all  further  liabilities  as  such  for  the 
subsequent  acts  or  omissions  of  the  said  officer  or  fiduciary  after  the  date  of 
the  said  surety  being  so  relieved  or  discharged,  and  discharging  said  trustee, 
officer  or  other  fiduciary.     (R.  C.  1905,  §  4461.) 

§  4911.  Report  of  Taxes.]  Every  foreign  corporation  doing  business  in 
this  state,  under  the  provisions  of  this  article,  shall,  at  the  time  of  making  the 
annual  statement  of  business  done  as  required  by  law,  pay  to  the  commissioner 
of  insurance  two  and  one-half  per  cent,  of  the  gross,  premiums,  fees  or  charges 
received  in  this  state  during  the  preceding  year  upon  all  bonds  or  undertakings 
written  by  it,  for  or  in  behalf  of  any  person  in  this  state,  and  only  upon  and 
after  the  payment  of  such  sum,  the  commissioner  of  insurance  shall  issue  the 
annual  certificate  provided  by  law.     (R.  C.  1905,  §  4462.) 

§  4912.  Any  corporation  organized  under  the  laws  of  this  state,  or  of 
any  state  or  country,  to  transact  the  business  of  fidelity  insurance  and  cor- 
porate suretyship,  and  authorized  to  do  business  in  this  state,  which  makes 
contracts  of  insurance  guaranteeing  the  fidelity  of  persons  holding  positions 
of  trust  in  public  office,  shall  be  held  responsible  to  any  person  for  any  loss 
or  damage  which  he  may  suffer  by  reason  of  any  fraud  or  misrepresentation 
practiced  upon  him  by  such  public  official  under  the  guise  of  or  by  virtue  of 
his  office.      (1913,  Ch.  193.) 

Article  17 — Provisions  Peculiar  to  Foreign  Insurance  Companies. 

§  4913.  Conditions  of  Admission.  Articles  and  Statement  Filed. 
Must  be  Legally  Organized.  Appoint  Commissioner  Its  Attorney  for 
Service.  Resident  Agents.]  No  foreign  insurance  company  shall  directly 
or  indirectly  take  any  risk  or  transact  the  business  of  insurance  in  this  state 
until : 

1.  It  shall  deposit  with  the  insurance  commissioner  a  certified  copy  of 
its  articles  of  incorporation  and  a  statement  of  its  financial  condition  and  busi- 
ness in  such  form  and  detail  as  he  may  require,  signed  and  sworn  to  by  its 
president  and  secretary  or  other  proper  officers. 

2.  It  shall  satisfy  the  insurance  commissioner  that  it  is  fully  and  legally 
organized  under  the  laws  of  its  state  or  government  to  do  the  business  it 
proposes  to  transact;  that  it  has  a  fully  paid  up  and  unimpaired  capital,  ex- 
clusive of  stockholders'  obligations  of  any  description,  of  an  amount  not  less 
than  is  required  by  section  4S(!::  ami,  if  a  mutual  company,  that  its  assets 
are  not  less  than  is  required  by  section  4870,  that  such  capital  or  net  assets 
are  well  invested  and  immediately  available  for  the  payment  of  losses  in  this 
state;  and  that  it  Insures  on  any  single  hazard  a  sum  no  larger  than  one-tenth 
of  its  net  assets. 

3.  It  shall  by  a  duly  executed  instrument,  filed  in  his  office,  constitute  and 
appoinl  the  commissioner  of  insurance  and  his  successors  its  true  and  lawful 
attorney  upon  whom  all  process  in  any  action  or  proceeding  against  it  may 
be  served  and  therein  shall  agree  that  any  process  which  may  be  served  upon 
its  said  attorney  shall  be  of  the  same  force  and  validity  as  if  served  on  the 
company  and  that  the  authority  thereof  shall  continue  in  force  irrevocable  so 
long  as  any  liability  of  the  company  remains  outstanding  in  this  state.  Service 
upon  such  attorney  shall  be  deemed  sufficient  service  upon  the  company.     When- 


STATE   OF   NORTH    DAKOTA  ;};$ 

ever  process  against  any  foreign  insurance  company,  doing  business  in  this 
state,  shall  be  served  upon  the  commissioner  of  insurance,  he  shall  forthwith 
mail  ;'.  copy  of  such  process,  postage  prepaid,  and  directed  to  such  company 
at  its  principal  place  of  business,  or  if  it  is  a  foreign  company,  to  its  resident 
manager  in  the  United  States,  or  to  such  other  person  as  may  have  been  pre- 
viously designated  by  it  by  written  notice  filed  in  the  office  of  the  commissioner 
of  insurance.  As  a  condition  of  valid  and  effectual  service  the  plaintiff  shall 
pay  to  the  commissioner  of  insurance  at  the  time  (if  service  the  sum  of  two 
dollars,  which  the  plaintiff  shall  recover  as  taxable  costs  if  he  shall  prevail  in 
his  action.  The  commissioner  shall  keep  a  record  of  all  such  process  which 
shall  show  the  time  and  hour  of  service. 

4.     It  shall  appoint  as  its  agents  in  this  state  'only  residents  thereof.      (R. 
0.  J  905,  §  4463.) 

Failure  of  foreign  corporation  to  comply  with  law  as"  to  doing  business 
in  state  justifies  direction  of  verdict  against  it  in  suit  for  breach  of  eon- 
tract.     Chesley  v.  Soo  Lignite  Coal  Co.,  19  N.  D.  18,  121  N.  W.  73. 

Restrictions  on  business  of  foreign  insurance  company.     24  L.  R.  A.  298. 
Effect   on  insurance  of  non-compliance   with   statutory   requirements   as 
to  recovery  on  the  policy.     20  L.  R.  A.  405. 

Article  18 — Provisions  Common  to  all  Insurance  Companies. 
§  4914.  Limit  of1  Risk.]  No  company  organized  under  this  chapter,  or 
transacting  business  in  this  state  shall  expose  itself  to  loss  on  any  one  risk  or 
hazard  to  an  amount  exceeding  ten  per  cent,  of  its  paid  up  capital,  exclusive 
of  any  guarantee,  surplus,  or  special  reserve  fund,  unless  the  excess  shall  be 
reinsured  in  some  other  good  reliable  company.      (R.  C.  1905,  §  4464.) 

Board  of  railroad  commissioners  may  inquire  into  general  business  con- 
duct and  reliability  of  sureties  on  bonds  given  by  grain  elevator  operator. 
State  ex  rel.  Dakota  Trust  (Jo.  v.  Stutsman,  24  N.  D.  68,  139  N.  W.  83. 
<>  4915.  Annual  Statement,  Publication  Thereof.]  Every  insurance 
company  doing  business  in  this  state  must  transmit  to  the  commissioner  of 
insurance  a  statement  of  its  condition  and  business  for  the  year  ending  on 
the  preceding  thirty-first  day  of  December,  which  shall  be  rendered  not  later 
than  the  first  day  of  March  in  each  year.  Foreign  insurance  companies  shall 
have  until  the  following  first  day  of  December  to  transmit  their  statements  of 
business,  other  than  that  taken  in  the  United  Stales.  It  shall  be  the  duty  of 
the  insurance  commissioner  upon  the  date  of  the  receipt  of  any  such  statement 
to  stamp  thereon  the  date  of  the  receipt  of  such  statement  in  his  office,  and 
the  insurance  commissioner  is  hereby  prohibited  from  receiving  such  statement 
from  any  company  after  the  day  which  is  herein  designated  for  the  filing  of 
such  statement,  unless  the  same  be  accompanied  by  the  penalty  by  law  provided 
for  each  day's  delinquency  in  filing  such  statement.  Such  statements  must  lie 
published  at  least  three  times  in  a  newspaper  of  general  circulation  printed 
and  published  in  each  judicial  district  of  the  state  in  which  such  insurance 
eompany  shall  have  an  agency,  provided,  however,  that  the  statements  of  state, 
county  and  town  mutual  insurance  companies  need  only  be  published  once  in 
a  newspaper  selected  at  their  annual  meeting  in  the  county  wherein  such  com- 
pany does  business.  Statements  for  publication  shall  be  made  out  on  blank* 
furnished    by    the   commissioner   of   insurance    and    the   certificate   of   authority 


34  INSURANCE  LAWS 

of  the  commissioner  of  insurance  for  the  company  to  do  business  in  this  state 
shall  be  published  in  connection  with  such  statement.  Proof  of  publication 
shall  be  filed  with  the  commissioner  of  insurance  in  all  cases  within  four  months 
from  the  time  of  such  filing  of  the  annual  statement.  Such  publication  shall 
be  made  at  the  authorized  rate  for  publishing  legal  notices.  The  commissioner 
of  insurance  shall  select  three  newspapers  of  general  circulation  published  in 
each  of  the  judicial  districts  from  which  such  companies  shall  select  one  in 
which  such  statements  shall  be  published.     (1911,  Ch.  159.) 

§  4916.     Contents  of   Annual   Statement.]      The   annual   statement   re- 
quired by  the  last  section  must  be  in  form  and  state  particulars  as  follows: 

1 .  The  name  of  the  company  and  where  located. 

2.  The  amount  of  capital  stock  actually  paid  in  cash. 
:!.     The  property  or  assets  of  the  company,  specifying: 

(a)  The  value,  as  nearly  as  may  be~,  of  the  real  estate  owned  by  the 
company. 

(b)  The  amount  of  cash  on  hand  in  the  office. 

(c)  The  amount  of  cash  on  deposit  in  banks. 

(d)  The  amount  of  cash  in  the  hands  of  agents  and  in  course  of  trans- 
mission. 

(e)  The  amount  of  loans  secured  by  bonds  and  mortgages,  being  first 
lien  on  real  estate  worth  double  the  amount  of  the  sum  loaned 
thereon. 

(f)  The  amount  of  stocks  and  bonds  owned  by  the  company,  specifying 
the  amount,  number  of  shares,  and  the  market  value  of  each  kind 
of  stock  on  the  day  of  making  the  statement. 

(g)  The  amount  of  stock  held  by  it  as  collateral  security  for  loans 
with  the  amount  loaned  on  each  kind  of  stock,  the  par  value  and 
market  value  thereof  on  the  day  the  statement  is  made. 

(h)    The  amount  of  all  other  sums  due  the  company. 

4.  The  liabilities  of  such  company,  specifying: 

(a)  The  amount  of  losses  unpaid. 

(b)  The  amount  of  claims  for  losses  resisted  by  the  company. 

(c)  The  whole  amount  of  unearned  premiums  on  outstanding  risks. 

(d)  The  amount  of  dividends  declared  and  due  and  remaining  unpaid. 

(e)  The  amount  of  dividends,  if  any.  declared  and  not  yet  due. 

(f)  The  amount  of  money  borrowed  and  remaining  unpaid,  and  the 
security,  if  any,  given  for  the  payment  thereof. 

(g)  The  amount  of  all  other  existing  claims. 

5.  The  income  of  the  company  during  the  preceding  year,  specifying: 

(a)  The  whole  amount  of  interest  received,  stating  separately  the 
amount  of  interest  received  on  loans  in  the  State  of  North  Dakota. 

(b)  The  whole  amount  of  cash  premiums  received,  stating  separately 
the  amount  of  premiums  received  on   policies  written    in  the  state. 

(c)  The  whole  amount  of  income  received  from  all  sources. 

6.  Expenditures  during  the  preceding  year,  specifying: 

(a)   The  whole  amount  of  losses  paid  during  the  preceding  year  stating 

♦  how  much  of  the  same  accrued  prior  and   how  much  subsequent  to 

the  date  of  the  preceding  statement;    also  stating  separately  the 


STATE  OF  NORTH  DAKOTA  35 

amount  of  losses  paid  upon  risks  taken  in  this  state  and  how  much 
accrued  prior  and  how  much  subsequent  to  the  preceding  statement. 

(b)  Tie  amount  of  dividends  paid  during  the  preceding  year. 

(c)  The  whole  amount  of  fees  and  commissions  paid  to  officers  and 
agents  during  the  preceding  year. 

(d)  The  amount  of  taxes  paid  during  the  preceding  year,  stating 
separately  the  amount  paid  in  this  state. 

(e)  The  amount  of  fees  paid  the  commissioner  of  insurance  of  this 
state. 

(f)  The  whole  amount  paid  for  salaries  for  officers  and  agents  during 
the  preceding  year. 

(g)  The  whole  amount  of  all  other  expenditures. 
I.     Such  statement  shall  further  specify: 

;a)   The  gross  amount  of  risks  taken  during  the  preceding  year,  statin^ 

the  amount  in  this  state  separately. 
(b)   The  whole  amount  of  risks  outstanding. 

(c)  The  whole  amount  of  losses  incurred  during  the  year,  including 
those  claims  not  yet  due,  stating  separately  those  incurred  in  this 
state. 

(d)  The  number  of  agents  in  this  state.     (R.  C.  1905,  §  4457.) 
See,  also  section  4931. 

§  4917.  Statements  Verified.  Duty  op  Commissioner.]  Such  state- 
ments must  be  verified  by  the  signature  and  oath  of  the  president  or  vice 
president  and  of  the  secretary  of  a  domestic  insurance  company,  and  by  the 
manager  or  general  agent  of  a  foreign  company  doing  business  in  this  state; 
and  it  shall  be  the  duty  of  the  commissioner  of  insurance  to  cause  the  informa- 
tion contained  in  such  statements  to  be  arranged  in  a  tabular  form  and  printed 
annually  for  distribution  to  the  companies  doing  business  in  this  state  and 
for  transmission  to  the  legislative  assembly  with  his  biennial  report.  (R.  C. 
1905,  $  4468.) 

§  4918.  Statements  of  Receivers.]  It  shall  be  the  duty  of  all  receivers 
of  insurance  companies  on  or  before  the  thirtieth  day  of  June  of  each  year  and 
at  any  other  time,  when  required  by  the  commissioner  of  insurance,  to  make 
and  file  annually  statements  of  their  assets  and  liabilities  and  of  their  income 
and  expenditures  in  the  same  manner  and  form  as  the  officers  of  such  companies 
are  required  by  law  to  make,  and  for  refusal  or  neglect  to  make  and  file  the 
same  they  shall  be  subject  to  the  same  penalty.     (R.  C.  1905,  §  4469.) 

§  4919.  Inquiry  Into  Condition  of  Companies.]  The  commissioner  of 
insurance  is  authorized  and  empowered  to  address  any  inquiries  to  any  insur- 
ance company  doing  or  applying  for  permission  to  do  business  in  this  state  in 
relation  to  its  doings  or  condition  or  any  other  matter  connected  with  its 
transactions  and  it  shall  be  the  duty  of  any  such  company  so  addressed  to  reply 
promptly  in  writing  to  any  such  inquiries.     (R.  C.  1905,  §  4970.) 

§  4920.  Agents  Must  Not  Act  Without  Certificate.]  No  agent  shall 
act  for  any  insurance  company  directly  or  indirectly  in  taking  risks  or  trans- 
acting the  business  of  insurance  without  procuring  from  the  commissioner  of 
insurance  a  certificate  of  authority,  stating  that  such  corporation  or  company 
has  complied  with  all  the  requisites  of  this  chapter.     The  statements  and  evi- 


36  INSURANCE  LAWS 

donees  of  investment  required  by  this  chapter  shall  be  renewed  from  year  to 
year  in  such  manner  and  form  as  are  required  by  this  chapter  and  the  com- 
missioner of  insurance  on  being  satisfied  that  the  capital  securities  and  invest- 
ments remain  secure  as  hereinbefore  provided  shall  furnish  a  renewal  of  the 
certificate  as  aforesaid.     (R.  C.  .1905,  §  4471.) 

Granting   or    revoking   of   certificate   to   transact   business   within    com- 
missioner's discretion.     State  v.  Carey,  2  N.  D.  36,  49  N.  W.  164. 

Soliciting  applications  necessary  in  formation  of  mutual  insurance  com- 
pany not  a  violation.    Montgomery  v.  Harker,  9  N.  D.  527,  84  N.  W.  369. 

Crime  for  agent  to  act  without  procuring  certificate  of  authority.     State 
v.  Hogan,  8  N.  D.  301,  78  N.  W.  1051,  73  Am.  St.  Rep.  759,  45  L.  R.  A.  166. 

§  4921.  Examination  Before  Granting  Certificates.  When  Domestic 
Companies  Examined.  Examination  of  Foreign  Companies.  Expenses.]  Be- 
for  granting  certificates  of  authority  to  an  insurance  company  to  issue  policies 
or  make  contracts  of  insurance  the  commissioner  of  insurance  shall  be  satisfied 
by  such  examination  and  evidence  as  he  sees  fit  to  make  and  require  that  such 
company  is  duly  qualified  under  the  laws  of  the  state  to  transact  business 
therein.  As  often  as  once  in  two  years  he  shall  personally,  or  by  his  deputy  or 
chief  clerk,  visit  each  domestic  insurance  company  and  thoroughly  inspect  and 
examine  its  affairs,  especially  as  to  its  financial  condition  and  ability  to  fulfill 
its  obligations  and  whether  it  has  complied  with  the  law.  He  shall  also  make 
an  examination  of  any  such  company  whenever  he  deems  it  prudent  to  do  so  or 
upon  the  request  of  five  or  more  of  the  stockholders,  creditors,  policy  holders 
or  persons  pecuniarily  interested  therein  who  shall  make  affidavit  of  their 
belief,  with  specifications  of  their  reasons  therefor,  that  such  company  is  in 
an  unsound  condition.  Whenever  he  deems  it  prudent  for  the  protection  of 
policy  holders  in  this  state  he  shall  in  like  manner  visit  and  examine,  or  cause 
to  be  visited  and  examined  by  some  competent  person  appointed  by  him  for 
that  purpose  any  foreign  insurance  company  applying  for  admission,  or  already 
admitted,  to  do  business  by  agencies  in  this  state  and  such  company  shall  pay 
the  proper  charges  incurred  in  such  examination,  including  the  expenses  of  the 
commissioner  or  his  deputy-  For  the  purposes  aforesaid  the  commissioner  or 
person  making  the  examination  shall  have  free  access  to  all  books  and  papers 
of  an  insurance  company  that  relate  to  its  business  and  to  the  books  and  papers 
kept  by  any  of  its  agents  and  may  summon  as  witnesses  and  examine  under 
oath  the  directors,  officers,  agents  and  trustees  of  any  such  company  and  any 
other  persons  in  relation  to  its  affairs,  transactions  and  condition.  (R.  C.  1905, 
§  4472.) 

§  4922.  Authority  Revoked  foe  False  Statemknt.  When  Revocation 
Set  Aside.]  If  the  commissioner  of  insurance  has,  or  shall  have  at  any  time 
after  examination,  reason  to  believe  that  any  annual  statement  or  other  report, 
required  or  authorized  by  this  article  made  or  to  be  made  out  by  an  officer  or 
agent  of  any  insurance  company  is  false,  it  shall  be  the  duty  of  said  commis- 
sioner of  insurance  immediately  to  revoke  the  certificate  of  authority  of  such 
company  and  mail  a  copy  of  such  revocation  to  such  company,  and  to  the  agents 
thereof  in  this  state  and  such  company  and  its  agents  after  such  notice  shall 
discontinue  the  issuance  of  any  new  policies  or  the  renewal  of  any  policy  pre- 
viously issued;  and  such  revocation  shall  not  be  set  aside  nor  any  new  certificate 


STATE  OF  NORTH  DAKOTA  37 

of  authority  be  given  until  satisfactory  evidence  shall  have  been  furnished  to 
said  commissioner  of  insurance  that  such  company  is  in  substance  and  in  fact 
in  the  condition  set  forth  in  such  statement  or  report  ami  that  all  requirements 
of  this  article  have  been  fully  complied  with.     (R.  C.  1905,  §  4-473.) 

§  4923.  Commissioner  Must  Ascertain  Net  Cash  Value  of  Life  Pol- 
icies.] The  commissioner  of  insurance  shall,  at  the  expense  of  the  company, 
as  soon  as  practicable  after  statements  are  filed,  proceed  to  ascertain  the  net 
cash  value  of  all  life  insurance  policies  in  force.  The  commissioner  of  insurance 
may,  however,  accept  such  valuation  from  the  proper  officer  of  the  company 
or  the  insurance  officer  of  the  state  in  which  such  company  is  located,  should  he 
deem  it  expedient  so  to  do.  When  the  actual  funds  of  any  life  or  accident 
insurance  company  doing  business  in  this  state  are  not  of  a  net  value  equal 
to  the  net  value  of  its  policies  according  to  the  combined  experience  or 
acturaries'  rate  of  mortality,  with  interest  at  four  per  cent,  per  annum,  it 
shall  be  the  duty  of  the  commissioner  of  insurance  to  give  notice  to  such  com- 
pany and  its  agents  to  discontinue  the  issuance  of  new  policies  in  this  state 
until  its  funds  have  become  equal  to  its  liabilities,  valuing  its  policies  as  afore- 
said. Any  officer  or  agent,  who  after  such  notice  has  been  given  issues  or 
delivers  a  new  policy  from  and  in  behalf  of  such  company  before  its  funds 
have  become  equal  to  its  liabilities  as  aforesaid  shall  forfeit  for  each  offense 
a  sum  not  exceeding  one  thousand  dollars.      (R.  C.  1905,   §   4474.) 

§  4924.  Tax.  How  Levied.]  Every  insurance  company  doing  business  in 
this  state,  except  joint  stock  and  mutual  companies,  organized  under  the  laws 
of  this  state,  shall  at  the  time  of  making  the  annual  statement  of  business  done, 
as  required  by  law,  pay  to  the  commissioner  of  insurance  two  ami  one-half  per 
cent,  of  the  gross  amount  of  premiums  received  in  this  state  during  the  pre- 
ceding year.  Upon  payment  of  such  sum  the  commissioner  of  insurance  shall 
issue  the  annual  certificates  provided  by  law.     (R.  C.  1905,  §  4475.) 

Association  incorporated  principally  to  secure  for  each  member  payment 
of  certain  sum  to  his  beneficiary  at  death  is  taxable  as  a  life  insurance  com- 
pany.    Masonic  Association  v.  Taylor,  2  S.  D.  324,  50  N.  W.  93. 

Ancient  Order  United  Workmen  is  exempt  from  state  tax.  Ancient 
Order,  U.  W.  v.  Shober,  16  S.  D.  513,  94  N.  W.  405. 

Imposes  "occupation  tax"  and  not  an  "ordinary  tax"  within  constitu- 
tion relating  to  taxation.  Queen  City  F.  Ins.  Co.  v.  Rasford,  27  S.  D.  164, 
130  N.  W.  44. 

State  tax  on  insurance  premiums.  57  L.  R.  A.  69. 
$  4925.  Authority  of  Foreign  or  Domestic  Company  Revoked.  How.] 
If  the  commissioner  of  insurance  is  of  opinion  upon  examination  or  other  evi- 
dence that  a  foreign  insurance  company  is  in  an  unsound  condition,  or  if  it 
has  failed  to  comply  with  the  law,  or  if  it,  its  onicer^  or  agents,  refuse  to  sub- 
mit to  examination,  or  to  perform  any  legal  obligation  in  relation  thereto,  or 
if  a  life  insurance  company,  that  its  actual  funds,  exclusive  of  its  capital,  are 
less  than  its  liabilities,  he  shall  revoke  or  suspend  all  certificates  of  authority 
granted  to  it  or  to  its  agents,  and  shall  cause  notifications  thereof  to  be  pub- 
lished three  times,  once  in  each  week  for  three  successive  weeks,  in  some  news- 
paper published  at  the  seat  of  government  and  no  new  business  shall  there- 
after he  done  by  it  or  its  agents  in  this  state  while  such  default  or  disability 


38  INSURANCE  LAWS 

continues,  nor  until  its  authority  to  do  business  is  restored  by  the  commis- 
sioner; provided,  further,  that  if  any  insurance  corporation  organized  under 
the  laws  of  any  other  state  or  country  and  having  been  authorized  to  transact 
business  in  this  state,  shall  remove  or  make  application  to  remove  into  any 
court  of  the  United  States  any  action  or  proceeding  begun  in  any  court  of  this 
state  upon  a  claim  or  cause  of  action  arising  out  of  any  business  or  transaction 
done  in  this  state,  or  upon  any  contract  made,  executed  or  to  be  performed 
herein,  the  commissioner  of  insurance  shall  revoke  all  certificates  of  authority 
granted  to  such  insurance  corporation,  or  to  its  agents,  and  shall  cause  notifica- 
tions thereof  to  be  published  three  times,  once  in  each  week  for  three  succes- 
sive weeks  in  some  newspaper  published  at  the  seat  of  government,  and  no  new 
business  shall  thereafter  be  done  by  it  or  its  agents  in  this  state  until  after 
the  expiration  of  three  years  from  the  date  of  such  last  publication.  If  upon 
examination  he  is  of  the  opinion  that  any  domestic  insurance  company  is 
insolvent,  or  has  exceeded  its  powers  or  has  failed  to  comply  with  any  provi- 
sions of  law,  or  that  its  condition  is  such  as  to  render  its  further  proceedings 
hazardous  to  the  public  or  its  policy  holders,  he  shall  apply  to  the  district 
court  of  the  county  in  which  the  principal  office  of  the  company  is  located  to 
issue  an  injunction  restraining  it  in  whole  or  in  part  from  further  proceeding 
with  its  business.  The  court  or  judge  may,  in  its  discretion,  issue  an  injunc- 
tion forthwith  or  upon  notice  and  hearing  thereon,  and  after  a  full  hearing 
of  the  matter  may  dissolve  or  modify  such  injunction  or  make  it  perpetual, 
and  may  make  all  orders  and  decrees  needful  in  the  premises  and  may  appoint 
agents  or  receivers  to  take  possession  of  the  property  and  effects  of  the  com- 
pany and  to  settle  its  affairs  according  to  the  course  of  proceedings  in  equity. 
(E.  C.  1905,  §  4476.) 

§  4926.  Insurance  by  Resident  Agents  Only.]  No  insurance  company 
shall  do  business  in  this  state,  except  through  its  authorized  agents  who  must 
be  residents  of  and  have  their  office  or  place  of  business  in  this  state.  All 
policies  not  written  in  accordance  with  the  foregoing  provisions  shall  be  deemed 
a  violation  of  this  article.     (R.  C.  1905,  §  4477.) 

§  4927.  Penalty  for  Not  Making  Statement.  For  False  Statement.] 
Any  insurance  company  doing  business  in  this  state  that  neglects  to  make  the 
statements  in  the  manner  and  within  the  time  in  this  article  required  shall 
forfeit  one  hundred  dollars  for  each  day's  neglect,  and  upon  notice  by  the 
insurance  commissioner  to  that  effect,  its  authority  to  do  new  business  shall 
cease  while  such  default  continues  and  every  such  company  that  wilfully  makes 
false  statements  shall  be  liable  to  a  fine  of  not  less  than  five  hundred  dollars 
nor  more  than  one  thousand  dollars.  Any  new  business  done  by  the  insurance 
company  after  neglect  to  make  the  required  statements  shall  be  deemed  to  be 
done  in  violation  of  law.     (R.  C.  1905,  §  4478.) 

§  4928.  Penalty  When  There  is  no  Specific  Provision.]  For  violation 
of  any  provision  of  this  chapter  when  no  penalty  is  specifically  provided  for 
herein  the  offender  shall  be  punished  by  a  fine  of  not  less  than  one  hundred 
dollars  nor  more  than  five  hundred  dollars.      (R.  C.  1005.  §  4479.) 

§  4929.  Fees.]  There  shall  be  paid  by  every  company  doing  business  in 
this  Btate,  except  county  mutual  insurance  companies,  the  following  fees: 

Upon  filing  articles  of  incorporation,  or  copies  thereof,  twenty-five  dollars. 


STATE  OF  NORTH  DAKOTA  39 

Upon  filing  the  annual  statement,  ten  dollars. 

For  each  certificate  of  authority  and  certified  copy  thereof,  two  dollars. 

For  every  copy  of  any  paper  filed  in  the  insurance  department,  the  sum  of 
twenty  cents  per  folio;  and  for  affixing  the  official  seal  on  such  copy  and  certi- 
fying the  same,  the  sum  of  one  dollar. 

For  official  examination  of  companies  under  this  article  the  actual  expense 
incurred,  not  to  exceed  ten  dollars  per  day.     (R.  C.  1905,  §  4480.) 

§  4930.  Same  Conditions  Imposed  on  Companies  ok  Other  States  as 
They  Impose  on  Domestic  Companies.]  Whenever  the  laws  of  any  other 
state  of  the  United  States  or  foreign  country  shall  require  of  insurance  com- 
panies incorporated  under  the  laws  of  this  state,  or  of  the  agent  thereof,  any 
deposits  of  securities  in  such  state  for  the  protection  of  policy  holders  or 
otherwise,  or  any  payment  for  taxes,  fines,  penalties,  certificate  of  authority, 
license  or  fees  greater  than  the  amount  required  for  such  purposes  from  similar 
companies  of  other  states  by  the  then  existing  laws  of  this  state,  then  and  in 
every  such  case,  all  insurance  companies  of  such  states  establishing  or  having 
heretofore  established  an  agency  in  this  state,  shall  be  and  are  hereby  required 
to  make  the  same  deposit  for  a  like  purpose  with  the  state  treasurer  of  this 
state,  and  to  pay  to  the  commissioner  of  insurance  an  amount  equal  to  the 
amount  of  such  charges  and  payment  imposed  by  the  laws  of  such  other  states 
upon  the  companies  of  this  state  and  the  agents  thereof.  (R.  C.  1905,  §  4481.) 
Restrictions  on  business  of  foreign  insurance  companies.     24  L.  R.   A. 

298. 

Effect  on  insurance  by  foreign  company  of  non-compliance  with  statutory 

requirements.     20  L.  R.  A.  405. 

Right   of   burglary   and   theft    insurance   companies    to    do   business    in 

foreign  states.     46  L.  R.  A.   (N.  S.)   563. 

Article  19 — Reports  of  Life  Insurance  Companies. 
§  4931.  Annual  Report,  Contains  What.]  In  addition  to  any  other 
matter  which  may  be  required  by  law  or  pursuant  to  law  by  the  commissioner 
of  insurance  to  be  stated  therein,  every  annual  report  of  every  life  insurance 
company  doing  business  in  this  state,  shall  contain  an  accurate,  concise  and 
complete  statement  of  the  following  matters,  to-wit: 

1.  All  the  real  property  held  by  the  company,  the  dates  of  acquisition, 
the  names  of  the  vendors,  the  actual  cost,  the  value  at  which  it  is  carried  on 
the  company's  books,  the  market  value,  the  amounts  expended  during  the  year 
for  repairs  and  improvements,  the  gross  and  net  income  from  each  parcel,  and 
if  any  portion  thereof  be  occupied  by  the  company  the  rental  value  thereof,  a 
statement  of  any  certificate  issued  by  the  commissioner  extending  the  time  for 
the  disposition  thereof,  and  all  purchases  and  sales  made  since  the  last  annual 
statement,  with  particulars  as  to  dates,  names  of  vendors  and  vendees  and  tiie 
consideration. 

2.  The  amount  of  existing  loans  upon  the  security  of  real  property,  stating 
the  amount  loaned  upon  property  in  each  state  and  foreign  country. 

3.  The  moneys  loaned  by  the  company  to  any  person  other  than  loans 
upon  the  security  of  real  property  above  mentioned  and  other  than  loans  upon 
policies  the  actual  borrowers  thereof,  the  maturity  and  the  rate  of  interest  of 
such  loans,  the  securities  held  therefor,  and   all   substitutions  of  securities  in 


40  [NSURANCE  LAWS 

connection   therewith,   and  the  same  particulars  with   reference   to   any    loans 
made  or  discharged  since  the  last  annual  statement. 

4.  All  other  property  owned  by  the  company  or  in  which  it  has  any  interesl 
(including  all  securities,  whether  or  not  recognized  by  law  as  proper  invest- 
ments), the  dates  of  acquisition,  from  whom  acquired,  the  actual  cost,  the  value 
at  which  the  property  is  carried  upon  the  books,  the  market  value,  the  interest 
or  dividends  received  thereon  during  the  year;  also  all  purchases  and  sales 
of  property  other  than  real  estate  made  since  the  last  annual  statement  with 
particulars  as  to  dates,  names  of  purchasers  and  sellers,  and  the  consideration; 
ami  also  the  income  received  ami  outlays  made  in  connection  with  all  such 
property. 

5.  All  commissions  paid  to  any  persons  in  connection  with  loans  or  pur- 
chases or  sales  of  any  property,  and  a  statement  of  all  payments  for  legal 
expenses,  giving  particulars  as  to  dates,  amounts  and  names  and  addresses  of 
payees. 

6.  All  moneys  expended  in  connection  with  any  matter  pending  before 
any  legislative  body  or  any  officer  or  department  of  government,  giving  par- 
ticulars as  to  dates,  amounts,  names  and  addresses  of  payees,  the  measure  or 
proceeding  in  connection  with  which  the  payment  was  made,  and  the  interest 
of  the  company  therein. 

7.  The  names  of  officers  and  directors  of  the  company,  the  proceedings  at 
the  last  annual  election,  giving  the  names  of  candidates  and  the  number  of 
votes  cast  for  each,  and  whether  in  person,  by  proxy  or  mail. 

8.  The  salary,  compensation  and  emoluments  received  by  officers  or  direct- 
ors and  where  the  same  amount  to  more  than  five  thousand  dollars,  that  received 
by  any  person,  firm  or  corporation,  with  particulars  as  to  dates,  amounts, 
payees  and  the  authority  by  which  the  payment  was  made;  also  all  salaries 
paid  to  any  representative  either  at  the  home  office,  or  at  any  branch  office, 
or  agency,  for  agency  supervision. 

9.  The  largest  balances  carried  in  each  bank  or  trust  company  during  each 
month  of  the  year. 

10.  All  death  claims  resisted  or  compromised  during  the  year  with  par- 
ticulars as  to  sums  insured,  sums  paid  and  reasons  assigned  for  resisting  or 
compromising  the  same  in  each  case. 

11.  A  complete  statement  of  the  profits  and  losses  upon  the  business 
transacted  during  the  year  and  the  sources  of  such  gains  and  losses,  and  a  state- 
ment showing  separately  the  margins  upon  premiums  for  the  first  year  of 
insurance  and  the  actual  expenses  chargeable  to  the  procurement  of  new  busi- 
ness incurred  since  the  last  annual  statement.  A  foreign  company,  issuing  both 
participating  and  non-participating  policies,  shall  make  a  separate  statement 
of  profits  and  losses,  margins  and  expenses,  as  aforesaid,  with  reference  to 
each  of  said  kinds  of  business,  and  also  showing  the  manner  in  which  any 
general  outlays  of  the  company  have  been  apportioned  to  each  of  such  kinds 
of  business. 

12.  A  statement  separately  showing  the  amount  of  the  gains  of  the  com- 
pany   for  the  year   attributable  to   policies   written   after   December   thirty-first, 

nineteen  hundred  and and    the  precise  method    ly    which   the  calculation 

lias  been  made. 


STATE  OP  NORTH  DAKOTA  41 

1.",.  The  rates  of  annual  dividends  declared  during  the  year  for  all  plans 
of  insurance  and  all  durations  for  ages  at  entry,  twenty-five,  thirty-five,  forty- 
five  and  fifty-five,  and  the  precise  method  by  which  such  dividends  have  been 
calculated. 

14.  A  statement  showing  the  rates  of  dividends  declared  upon  deferred 
dividend  policies  completing  their  dividend  periods  for  all  plans  of  insurance 
and  the  precise  methods  by  which  said   dividends  have  been  calculated. 

15.  A  statement  showing  any  and  all  amounts  set  apart  or  provisionally 
ascertained  or  calculated  or  held  awaiting  apportionment  upon  policies  with 
deferred  dividend  periods  longer  than  one  year  for  all  plans  of  insurance  and 
all  durations  and  for  ages  of  entry  as  aforesaid,  together  with  the  precise 
statements  of  the  methods  of  calculation  by  which  the  same  have  been  pro- 
visionally or  otherwise  determined. 

It).  A  statement  of  any  and  all  reserve  or  surplus  funds  held  by  the  com- 
pany and  for  what  purpose  they  are  claimed  respectively  to  be  held.  (1907, 
Ch.  1410 

See,  also,  section  4916. 

Article  21 — Live  Stock. 

§  4951.  GENERAL  Laws  Govern.]  Companies  organized  under  this  article 
shall  be  subject  to  the  general  statutes  of  this  state  relating  to  domestic  mutual 
insurance  companies,  in  so  far  as  the  same  are  applicable  and  not  in  conflict 
with  the  express  provisions  of  this  article.      (R.  C.   1905,  §  4500.) 

§  4952.  Live  Stock  Insurance  Companies,  How  Organized.]  Any  num- 
ber of  persons  not  less  than  ten,  of  whom  at  least  five  shall  be  residents  of 
this  state,  may  form  a  corporation  for  mutual  insurance  against  loss  or  damage 
to  pure  bred  live  stock  occasioned  by  the  death  of  the  property  insured  by  fire, 
lightning,  accident  or  disease,  which  shall  possess  the  powers  and  be  subject 
to  the  duties  and  liabilities  of  other  insurance  companies,  except  as  herein 
otherwise  provided.  The  term  "pure  bred  live  stock,"  as  used  in  this  article 
includes  horses,  cattle,  sheep  and  swine  of  either  sex  and  any  breed;  provided, 
that  the  animals  insured  must  be  duly  registered  in  the  recognized  stud 
or  herd  book  of  such  breed;  and  provided,  further,  that  corporations  may  be 
organized  under  this  article  for  the  purpose  of  insuring  either  or  all  of  said  live 
stock,  against  loss  or  damage  to  the  property  insured  by  reason  of  fire,  light- 
ning, accident  or  disease,  or  any  or  all  of  them.     (R.  C.  1905,  §  4501.) 

§  4953.  Management.]  The  general  management  of  the  business  cf 
such  company  shall  be  vested  in  a  board  of  directors  of  not  less  than  five  nor 
more  than  nine  directors,  each  of  whom  shall  during  his  term  of  office  be  a 
policy  holder  in  the  company.  Such  directors  shall  be  elected  annually  and  shall 
hold  their  offices  for  one  year  and  until  their  successors  are  elected  ami  qualified. 
(R.  C.  1905,  $  4502.) 

§  4954.  Board  of  Directors  to  Elect  Officers  and  Fix  Bond.]  It  shall 
be  the  duty  of  the  board  of  directors  to  annually  elect  such  officers  of  the 
corporation  as  may  be  provided  in  the  articles  of  incorporation  and  by-laws 
of  the  company.  It  shall  also  bo  the  duty  of  the  said  board  of  directors  to 
fix  the  amount  of  the  bonds  required  of  the  treasurer  and  other  officers  having 
or  likely  to  have  control  of  any  funds  belonging  to  the  company,  which  bonds, 
in   the  case  of  the  treasurer,  shall  not  be  less  than   ten  thousand   dollars,  and 


42  INSURANCE  LAWS 

in  the  case  of  the  secretary  not  loss  than  two  thousand  five  hundred  dollars, 

and  as  near  as  may  be  shall  equal  twice  the  amount  of  money  likely  at  any 
one  lime  to  be  in  the  hands  of  the  respective  officers.     (R.  C.  1905,  §  4503.) 

§  4955.  Members  May  Vote  by  Proxy.]  Members  may  vote  by  proxy 
dated  and  executed  within  three  months  and  returned  and  recorded  on  the 
books  of  the  company  three  days  or  more  before  the  meeting  at  which  they  are 
to  be  used.     (R.  C.  1905,  §  4504.) 

§  4956.  Amount  of  Subscribed  Insurance  Required.]  No  policy  shall 
be  issued  by  an  insurance  company  organized  under  this  article  until  not  less 
than  thirty  thousand  dollars  of  insurance  in  not  less  than  fifteen  separate  risks 
have  been  subscribed  for  and  entered  on  its  books.     (R.  C.  1905,  §  4505.) 

Article  22 — Chattel  Morgtgages  in  Application. 

§  4957.  Chattel  Mortgage  Void  Unless  on  Separate  Paper.]  It  shall 
be  unlawful  for  any  insurance  company,  or  any  agent  or  solicitor  therefor 
within  this  state,  to  take  or  procure  to  be  taken  upon  the  property  to  be  in- 
sured, or  any  other  property,  a  chattel  mortgage,  securing  the  payment  of  the 
premium  due  or  to  become  due,  including  policy  fees,  or  any  part  thereof, 
unless  such  chattel  mortgage  shall  be  printed  or  written  upon  a  separate  and 
distinct  paper  from  the  application,  and  no  mortgage  given  in  violation  of 
the  provisions  of  this  section  shall  be  valid  or  binding  upon  the  party  executing 
the  same,  but  shall  in  all  things  be  null  and  void.     (R.  C.  1905,  §  4506.) 

§  4958.  Penalty  for  Violating  Last  Section.]  Any  insurance  company, 
or  any  agent  or  solicitor  thereof,  violating  the  provisions  of  the  last  section 
shall  be  deemed  guilty  of  a  misdemeanor;  and  such  company  shall  forfeit  all 
its  rights  and  privileges  under  its  articles  of  incorporation.  (R.  C.  1905, 
§   45070 

Article  23 — Licensing  Insurance  Agents. 

§  4959.  Agents  Defined.]  Whoever  solicits  insurance  on  behalf  of  any 
insurance  corporation  or  person  desiring  insurance  of  any  kind,  or  transmits 
an  application  for  a  policy  of  insurance,  other  than  for  himself,  to  or  from 
any  such  corporation,  or  who  makes  any  contract  for  insurance,  or  collects  any 
premium  for  insurance,  or  in  any  manner  aids  or  assists  in  doing  either,  or 
in  transacting  any  business  of  like  nature  for  any  insurance  corporation,  or 
advertising  to  do  any  such  thing,  shall  be  held  to  be  an  agent  of  such  corpora- 
tion to  all  intents  and  purposes,  unless  it  can  be  shown  that  he  receives  no 
compensation  for  such  services.  This  section  shall  not  apply  to  fraternal, 
assessment  or  beneficiary  associations.      (R.   C.   1905,   §  4508.) 

§  4960.  Must  Have  License.  Penalty  for  Non-compliance.]  No 
officer  or  broker,  agent  or  sub-agent  of  any  insurance  corporation  of  any  kind, 
except  county  mutual  insurance  corporations  of  this  state,  shall  act  or  aid 
in  any  manner  in  transacting  the  business  of  or  with  such  corporation,  in 
placing  risks  or  effecting  insurance  therein,  without  first  procuring  from  the 
commissioner  of  insurance  a  certificate  of  authority  as  provided  by  law,  nor 
after  the  period  named  in  such  certificate  shall  have  expired.  Every  person 
violating  the  provisions  of  this  and  the  previous  section  shall  be  guilty  of  a 
misdemeanor  and  be  punished  by  a  fine  of  uo1  less  than  fifty  dollars  nor  more 
than  five  hundred  dollars  for  each  offense.      (B.  < '.   1905,  §  4509.) 

Effect  of  insurance  agent's   failure  to  procure   license.     1   L.  R.   A.   1159. 


STATE  OF  NOBTH  DAKOTA  43 

Article  24 — Resident  Agents  for  Transaction  of  Fire  Insurance 

Business. 

§  4961.  Foreign  Agents.]  No  insurance  company  or  association,  not 
incorporated  under  the  laws  of  this  state,  authorized  to  transact  business 
herein,  shall  make,  write,  place  or  cause  to  be  made,  written  or  placed,  any 
policy,  duplicate  policy  or  contract  of  insurance  of  any  kind  or  character,  or 
any  general  or  floating  policy,  upon  property  situated  or  located  in  this  state 
except  after  the  said  risk  has  been  approved  in  writing,  by  an  agent  who  is 
a  resident  of  this  state,  regularly  commissioned  and  licensed  to  transact  insur- 
ance business  therein,  who  shall  countersign  all  policies  so  issued  and  make  a 
record  of  the  same  on  books  provided  for  that  purpose  and  receive  the  com- 
mission thereon  when  the  premium  is  j>aid,  to  the  end  that  the  state  may 
receive  the  taxes  required  by  law  to  be  paid  on  the  premiums  collected  for 
insurance  on  all  property  located  in  the  state,  and  the  agents  be  paid  the 
commission  thereon.  Nothing  herein  shall  be  construed  to  prevent  any  such 
insurance  company  or  association,  authorized  to  transact  business  in  this  state, 
from  issuing  policies  at  its  principal  or  department  offices,  covering  property 
in  this  state,  provided  that  such  policies  are  issued  upon  applications  procured 
and  submitted  to  such  company  by  agents  who  are  residents  of  this  state,  and 
licensed  to  transact  the  business  of  insurance  herein,  and  who  shall  counter- 
sign all  policies  so  issued  and  receive  the  commission  thereon  when  paid; 
provided,  no  provision  of  this  section  is  intended  to  or  shall  apply  to  direct 
insurance  covering  the  rolling  stock  of  railroad  corporations  or  property  in 
transit,  while  in  the  possession  and  custody  of  railroad  corporations  or  other 
common  carriers  nor  to  movable  property  of  such  common  carrier  used  or 
employed  by  them  in  their  business  as  common  carriers  of  freight,  merchandise 
or  passengers.     (R.  C.  1905,  §  4510.) 

§  4962.  Cannot  Reinsure.]  No  fire  insurance  company  or  association 
shall  reinsure,  or  assume  as  a  reinsuring  company  or  otherwise  in  any  manner 
or  form  whatever,  the  whole  or  any  part  of  any  risk  or  liability,  covering 
property  located  in  this  state,  of  any  insurance  company  or  association  not 
authorized  to  transact  business  in  this  state.     (R.  C.  1905,  §  4511.) 

§  4963.  Insurance  Commissioner.  Examine  Records,  Books,  Etc.] 
Whenever  the  commissioner  of  insurance  shall  have  or  receive  information  that 
any  fire  insurance  company  or  association,  not  incorporated  under  the  laws  of 
this  state,  has  violated  any  of  the  provisions  of  section  4961,  he  is  authorized, 
at  the  expense  of  such  company  or  association,  to  examine,  by  himself  or  his 
accredited  representative  at  the  principal  office,  or  offices  of  such  company  or 
association,  located  in  the  United  States  of  America,  and  also  at  such  other 
offices  or  agencies  of  such  company  or  association  as  he  may  deem  proper,  all 
books,  records  and  papers  of  such  company  or  association  and  may  examine 
under  oath,  the  officers  and  managers  and  agents  of  such  company  or  associa- 
tion as  to  such  violation  or  violations.  The  refusal  of  any  such  company  or 
association  to  submit  to  such  examination  or  to  exhibit  its  books  and  records 
for  inspection  shall  be  presumptive  evidence  that  it  is  violating  the  provisions 
of  section  4961,  and  shall  subject  it  to  the  penalties  prescribed  and  imposed 
in  section  4964.     (R,  C.  1905,  §  4512.) 

§  4964.     Penalty  for  Violation.]     Any  insurance  company  or  association 


44  INSURANCE  LAWS 

violating  or  failing  1<»  observe  and  comply  with  any  of  the  provisions  of  sec- 
tions applicable  thereto,  shall  l>c  subject  to  and  liable  to  pay  a  penalty  of 
five  hundred  dollars  for  each  violation  thereof  and  for  each  failure  to  observe 
and  comply  with  any  provisions  of  the  three  previous  sections  mentioned.  Such 
penalty  may  be  collected  and  recovered  in  an  action  broughl  in  the  name  of 
the  state  in  any  court  having  jurisdiction  thereof.  Any  insurance  company 
or  association  which  shall  neglect  and  refuse  for  thirty  days  after  judgment 
in  any  such  action  to  pay  and  discharge  the  amount  of  such  judgment  shall 
have  its  authority  to  transact  business  in  this  state  revoked  by  the  commis- 
sioner of  insurance  and  such  revocation  shall  continue  for  at  least  one  year 
from  the  date  thereof,  nor  shall  any  insurance  company  or  association  whose 
authority  to  transact  business  in  this  state  shall  have  been  so  revoked  be  again 
authorized  or  permitted  to  transact  business  herein  until  it  shall  have  paid 
the  amount  of  any  such  judgment,  and  shall  have  filed  in  the  office  of  the 
commissioner  of  insurance  a  certificate  signed  by  its  president  or  other  chief 
officer  to  the  effect  that  the  terms  and  obligations  of  the  provisions  herein  are 
accepted  by  it  as  a  part  of  the  condition  of  its  right  and  authority  to  transact 
business  in  this  state.     (R.  C.  1905,  §  4513.) 


CHAPTER  19. 


Accident  and  Sickness  Insurance  Corporations,  Associations  and  So- 
cieties. 

§  4965.  Number  Requisite  to  Organization.]  Any  number  of  persons, 
not  less  than  five,  a  majority  of  whom  are  citizens  of-  this  state,  may  associate 
themselves  together  as  a  corporation,  association  or  society  for  the  purpose 
of  transacting  the  business  of  accident  or  sickness,  or  accident  and  sickness 
insurance  upon  the  assessment  plan.     (1907,  Ch.  157,  Pr.  1.) 

§  4966.  Compliance  Required.]  Every  corporation,  association  or  society 
organized  under  this  act  shall,  before  commencing  business,  comply  with  the 
provisions  of  this  act.     (1907,  Ch.  157,  Pr.  2.) 

§  4967.  Articles,  State  What.]  The  articles  of  incorporation  of  such 
organizations  shall  state  the  name  or  title  by  which  the  corporation,  associa- 
tion or  society  shall  be  known  in  law,  the  location  of  its  principal  office  (which 
office  must  be  located  in  this  state)  with  its  plan  of  doing  business  clearly  and 
fully  defined,  the  number  of  its  directors,  trustees  or  managers,  and  shall  be 
submitted  to  the  insurance  commissioner  and  attorney  general,  and  if  said 
articles  of  incorporation  are  found  to  comply  with  the  provisions  of  this  act 
they  shall  approve  the  same.  When  said  articles  of  incorporation  are  thus 
approved  they  shall  be  recorded  in  the  office  of  the  recorder  of  deeds  in  the 
county  where  such  organization  is  located,  and  of  the  secretary  of  state,  and  a 
notice  published  as  provided  for  under  the  general  incorporation  laws  of  the 
State  of  North  Dakota;  provided,  that  corporations,  associations  and  societies 
heretofore  incorporated  and  doing  business  in  this  state  shall  not  be  required 
to  re-incorporate.  But  any  corporation,  association  or  society  may  become  a 
corporation  under  this  act  and  avail  itself  of  the  provisions  herein  by  filing 
with  the  insurance  commissioner  a  certificate  signed  by  the  president  and  secre- 


STATE  OF  NORTH  DAKOTA  45 

tary  of  such  corporation,  association  or  society,  setting  forth  the  facts  as  to 
its  incorporation,  and  that  it  desires  to  avail  itself  of  the  provisions  of  this 
act  and  will  be  controlled  thereby  and  transact  its  business  thereunder;  pro- 
vided, this  act  shall  not  relieve  any  corporation,  association  or  society  now 
doing  business  in  this  state  from  the  fulfillment  of  any  contract  heretofore 
entered  into  with  its  members  under  its  policies  or  certificates  of  membership, 
nor  shall  any  member  be  relieved  thereby  from  his  or  her  part  of  the  contract. 
(1907,  Ch.  157,  Pr.  3.) 

§  4968.  Name  Forbidden.]  No  corporation,  association  or  society  organ- 
ized under  this  act  shall  take  any  name  or  title  in  use  by  any  other  corpora- 
tion, association,  or  society,  or  so  closely  resembling  such  name  as  to  deceive 
the  public  as  to  its  identity.     (1907,  Ch.  157,  Pr.  4.) 

§  4969.  Application  Contains  What.]  Each  corporation,  association  or 
society  organized  under  this  act  shall,  before  issuing  any  policy  or  certificate 
of  membership,  if  said  corporation,  association  or  society  has  not  membership, 
sufficient  to  pay  the  full  amount  of  the  certificate  or  policy  on  an  assessment, 
cause  the  application  for  insurance  to  have  printed  in  red  ink  in  a  conspicuous 
manner  along  the  margin  of  said  application  the  words  "It  is  understood  and 
agreed  that  the  amount  to  be  paid,  when  the  certificate  or  policy  issued  upon 
this  application  becomes  a  claim,  shall  be  dependent  upon  the  amount  collected 
for  an  assessment  made  to  meet  such  claim,"  and  they  must  have  actual 
applications  upon  at  least  two  hundred  and  fifty  persons  for  accident  indem- 
nity, or  accident  and  sick  benefits  in  such  corporation,  association  or  society 
as  the  case  may  be,  and  shall  file  with  the  insurance  commissioner  satisfactory 
proof  that  the  president,  secretary  and  treasurer  of  said  association  or  society 
will  faithfully  discharge  their  duties  as  such  officers  and  fully  comply  with 
this  act  in  the  organization  and  carrying  on  the  business  of  such  corporation, 
association  or  society.  A  list  of  said  applications  giving  the  name,  age  and 
residence  of  the  applicant,  together  with  the  annual  dues  and  the  proposed 
assessments  thereon  shall  be  filed  with  the  insurance  commissioner,  with  a 
sworn  statement  of  such  officers  and  that  such  parties  have  deposited  with 
them  one  advance  assessment  on  the  insurance  applied  for,  and  a  certificate 
of  a  solvent  bank  that  such  funds  are  deposited  therein  to  be  turned  over  to 
the  treasurer  of  the  corporation,  association  or  society  after  certificate  of 
authority  is  issued  by  the  insurance  commissioner  as  provided  herein.  (1907, 
Ch.  157,  Pr.  5.) 

§  4970.  Agent  Must  Have  Certificate  of  Authority.]  No  person 
shall  act  within  this  state  as  agent  in  receiving  or  procuring  applications  for 
accident  insurance  or  accident  and  sick  benefit  insurance  for  any  corporation, 
association  or  society  organized  under  this  act  (except  for  the  purpose  of 
taking  applications  for  organization),  unless  this  corporation,  association  or 
society  for  which  he  is  acting  lias  received  a  certificate  from  the  insurance 
commissioner  as  provided  in  this  act,  authorizing  said  corporation,  association 
or  society  to  transact  business  in  this  state,  nor  as  general  or  traveling  agent 
or  solicitor,  until  he  shall  have  received  from  the  insurance  commissioner  a 
certificate  in  substance  the  same  as  that  provided  for  in  section  4'.»76.  (1907, 
Ch.  157,  Pr.  6.) 

§  4971.     By-laws.]       The    bylaws    of    such    corporation,    association    or 


46  INSURANCE  LAWS 

society  shall  state  the  object  or  objects  for  which  the  money  to  be  collected 
is  intended.     (1907,  Oh.  157,  Pr.  7.) 

§  4972.  Age  of  Members.]  No  corporation,  association  or  society  organ- 
ized or  operating  under  this  act  shall  issue  any  certificate  of  membership  or 
policy  of  insurance  to  any  person  under  the  age  of  fifteen  years,  nor  over  the 
age  of  sixty-five  years.  Any  member  of  any  corporation,  association  or 
society  holding  a  policy  or  certificate  of  membership,  naming  a  beneficiary, 
operating  under  this  act  shall  have  the  right  at  any  time  with  the  consent  of 
such  corporation,  association  or  society  to  designate  a  new  and  different  bene- 
ficiary without  requiring  the  consent  of  such  beneficiary.  (1907,  Gh.  157, 
Pr.  8.) 

§  4973.  Annual  Report.]  The  business  year  of  such  corporation,  associa- 
tion or  society  organized  or  operating  under  this  act  shall  close  on  the  31st 
day  of  December  of  each  year,  and  such  corporation,  association  or  society 
shall,  within  sixty  days  thereafter,  prepare  under  oath  of  its  president  and 
secretary,  and  file  in  the  office  of  the  insurance  commissioner  a  detailed  state- 
ment of  its  assets,  liabilities,  receipts  from  assessments  and  all  other  sources, 
expenditures,  salaries  of  officers,  number  of  contributing  members,  losses  paid 
for  indemnity  and  benefits,  the  amount  paid  on  each  death  loss  and  answer 
such  other  interrogatories  as  the  insurance  commissioner  (who  shall  furnish 
blanks  for  the  purpose)  may  require,  in  order  to  ascertain  its  true,  financial 
condition,  and  shall  pay  upon  filing  each  annual  statement  the  sum  of  ten 
dollars.  The  insurance  commissioner  shall  publish  said  annual  statement  in 
detail  in  his  annual  report  and  for  the  purpose  of  verifying  such  statement  the 
insurance  commissioner  may  make,  or  cause  to  be  made,  an  examination  of  the 
affairs  of  any  corporation,  association  or  society  doing  business  under  this 
act  at  the  expense  of  the  corporation,  association  or  society,  which  expense  shall 
not  exceed  the  necessary  hotel  and  traveling  expenses  of  the  auditor  or  clerk. 
If  the  insurance  commissioner  appoints  some  person  not  employed  in  his  office 
to  make  the  examination  he  shall  in  addition  to  actual  expenses,  be  allowed 
not  to  exceed  five  dollars  per  day  for  the  time  actually  employed.  If  the  said 
insurance  commissioner  shall  deem  it  necessary  for  the  security  of  the  funds 
of  the  association,  he  may  require  the  official  bonds  of  the  officers  to  be  in- 
creased to  an  amount  not  to  exceed  double  the  sum  for  which  they  are  ac- 
countable, and  he  may  require  supplemental  reports  from  any  such  corporation, 
association  or  society  at  such  time  and  in  such  form  as  he  may  direct.  (1907, 
Ch.  157,  Pr.  9.) 

§  4974.  Reserve  Fund.]  Any  North  Dakota  corporation,  association  or 
society  organized  and  doing  business  under  this  act  may  create  and  maintain 
and  disburse  a  reserve  or  surplus  fund,  and  may  invest  such  funds  in  interest 
bearing  securities.     (1907,  Ch.  157,  Pr.  10.) 

§  4975.  Duty  of  Insurance  Commissioner.]  When  any  North  Dakota 
corporation,  association  or  society  operating  under  this  act  shall  fail  to  make 
its  annual  statement  to  the  insurance  commissioner  on  or  before  the  first  day 
of  March,  or  is  conducting  its  business  fraudulently  and  not  in  compliance 
with  this  act,  then  it  shall  be  the  duty  of  the  insurance  commissioner  to 
promptly  communicate  the  facts  to  the  attorney  general  who  shall  at  once 
commence  action  in  the  district  court  of  the  county  in  which  said  organization 


STATE  OF  NORTH  DAKOTA  47 

is  located,  or  before  any  judge  thereof,  citing  the  officers  to  appear  before  said 
court  or  judge,  and  if  upon  a  hearing  of  said  cause  it  is  found  to  be  for  the 
best  interests  of  the  holders  of  certificates  of  membership  or  policies  in  said 
corporation,  association  or  society,  said  court  or  judge  shall  have  the  power 
to  remove  any  officer  or  officers  of  said  corporation,  association  or  society  and 
appoint  others  in  their  place  until  the  next  annual  election.  If  it  is  found  to 
be  for  the  best  interest  of  said  certificate  or  policy  holder  that  the  affairs  of 
said  corporation,  association  or  society  be  wound  up,  said  court  or.  judge  shall 
so  direct,  and  for  that  purpose  may  appoint  a  receiver,  who  shall  regard  all 
proper  claims  for  benefits  under  said  certificates  as  preferred  claims.  No 
action  or  proceeding  shall  be  instituted  with  a  view  of  the  appointment  of 
a  receiver  or  closing  up  of  the  business  of  any  such  corporation,  association 
or  society  by  any  other  person,  or  in  any  other  manner  except  as  herein  pro- 
vided.    (1907,  Ch.  157,  Pr.  11.) 

§  4976.  Company's  Certificate  of  Authority.]  On  compliance  with  this 
act  by  any  corporation,  association  or  society  the  insurance  commissioner  shall 
issue  a  certificate  that  it  has  fully  complied  with  the  provisions  of  this  act, 
and  is  authorized  to  transact  business  for  a  period  of  one  year  from  April  1st 
of  the  year  of  its  issue.     (1907,  Ch.  157,  Pr.  12.) 

§  4977.  Voting  Proxy.]  At  any  regularly  constituted  meeting  of  the 
policy  holders  or  certificate  holders  of  any  corporation,  association  or  society 
doing  business  under  this  act,  each  policy  holder  or  certificate  holder  shall  be 
entitled  to  at  least  one  vote,  and  any  such  person  may  in  writing  authorize 
any  other  person  entitled  to  vote  at  such  meeting  to  vote  for  him.  (1907,  Ch. 
157,  Pr.  13.) 

§  4978.  Limit  Time  ov1  Suit.]  Any  corporation,  association  or  society 
organized  or  operating  under  this  act  may  limit  the  time  within  which  suit 
may  be  brought  against  it  on  any  claim  based  upon  its  policies  or  certificates 
of  membership,  and  after  the  expiration  of  the  time  thus  limited  shall  not  be 
liable  thereon ;  provided,  such  limitation  shall  be  incorporated  in  and  form  a 
part  of  the  contract  between  the  company,  association  or  society,  ami  the 
assured  or  its  members;  and  provided,  further,  that  such  limitation  shall  not 
be  limited  to  a  period  of  less  than  one  year  from  the  time  such  right  of  action 
accrues.     (1907,  Ch.  157,  Pr.  14.) 

§  4979.  Reciprocal  Penalties.]  Whenever  the  existing  or  future  laws 
of  any  other  state  of  the  United  States,  territory  or  province  of  any  other 
country,  or  the  rules  and  regulations  of  the  insurance  department  of  any  such 
state,  territory  or  province  shall  require  of  corporations,  associations  or 
societies  organized  and  doing  business  under  this  act,  any  payment  of  taxes. 
fines,  penalties,  certificates  of  authority,  licenses,  fees,  or  require  any  other 
duties,  examinations  or  acts  other  than  are  by  the  laws  of  this  state  required 
of  such  mutual  corporation,  association  or  society  organized  under  the  laws  of 
such  other  state,  territory  or  province,  then  the  insurance  commissioner  shall 
immediately  require  from  every  such  insurance  corporation,  association  or 
society  of  such  other  state,  territory  or  province  transacting  or  seeking  to 
transact  business  in  this  state,  the  like  payment  of  all  licenses,  fees,  taxes, 
fines  or  penalties,  and  the  like  doing  of  all  acts  which  by  the  laws  or  the 
rules  of  the  insurance  department  of  such   other   state,   territory  or   province. 


48  [NSURANCE  LAWS 

require    in   excess  of   the    licenses,    tees,   taxes,  statements,   fines,   penalties,   acts, 

examinations  or  duties  required  by  the  laws  of  this  state  of  the  mutual  com- 
panies of  such  other  states,  transacting  business  in  this  state.  (1907,  Ch.  157, 
Pr.   15.) 

§  4980.  Foreign  Corporations,  Licensed  When.]  When  any  corporation, 
association  or  society  not  organized  in  this  state  and  doing  business  of  accident 
or  sickness,  or  accident  and  sickness  insurance  shall  comply  with  the  require- 
ments of  this  act  applicable  to  it  and  shall  satisfy  the  insurance  commissioner 
that  it  is  in  a  solvent  condition  and  able  to  meet  its  obligations  at  maturity, 
he  shall  issue  to  such  foreign  corporation,  association  or  society  a  certificate 
stating  that  such  corporation,  association  or  society  has  complied  with  the  laws 
of  this  state  and  authorizing  said  corporation,  association  or  society  to  do  and 
transact  such  business  in  this  state  subject  to  the  provisions  of  this  act. 
(1907,  Ch.  157,  Pr.  16.) 


CHAPTER   23. 

Article  6 — Fraternal  Benefit  Societies. 

§  5059.  Fraternal  Benefit  Societies  Defined.]  Any  corporation,  society, 
order  or  voluntary  association,  without  capital  stock,  organized  and  carried  on 
solely  for  the  mutual  benefit  of  its  members  and  their  beneficiaries,  and  not 
for  profit,  and  having  a  lodge  system  with  ritualistic  form  of  work  and  repre- 
sentative form  of  government,  and  which  shall  make  provisions  for  the  pay- 
ment of  death  benefits  in  accordance  with  section  5062  hereof,  is  hereby  declared 
to  be  a  fraternal  benefit  society.     (1913,  Ch.  191,  Pr.  1.) 

§  5060.  Lodge  System  Defined.]  Any  society  having  a  supreme  govern- 
ing or  legislative  body,  and  subordinate  lodges  or  branches  by  whatever  name 
known,  into  which  members  shall  be  elected,  initiated  and  admitted  in  accord- 
ance with  its  constitution  laws,  rules,  regulations  and  prescribed  ritualistic 
ceremonies,  which  subordinate  lodges  or  branches  shall  be  required  by  the  laws 
of  such  society  to  hold  regular  or  stated  meetings  at  least  once  in  each  month, 
shall  be  deemed  to  be  operating  on  the  lodge  system.     (1913,  Ch.  191,  Pr.  2.) 

§  5061.  Representative  Form  of  Government  Defined.]  Any  such 
society  shall  be  deemed  to  have  a  representative  form  of  government  when 
it  shall  provide  in  its  constitution  and  laws  for  a  supreme  legislative  or  govern- 
ing body,  composed  of  representatives  elected  either  by  the  members  or  by 
delegates  elected  directly  or  indirectly  by  the  members,  together  with  such 
other  members  as  may  be  prescribed  by  its  constitution  and  laws;  provided, 
that  the  elective  members  shall  constitute  a  majority  in  number  and  have  not 
less  than  two-thirds  of  the  votes,  nor  less  than  the  votes  required  to  amend 
its  constitution  and  laws  and  provided,  further,  that  the  meetings  of  the 
supreme  or  governing  body,  and  the  election  of  officers,  representatives  or  dele- 
gates shall  he  held  as  often  as  once  in  four  years.  The  members,  officers, 
representatives  or  delegates  of  a  fraternal  benefit  society  shall  not  vote  by 
proxy.     (1913,  Ch.   191,   Pr.  3.) 

§  5061a.  Exemptions. ]  Except  as  herein  provided,  such  societies  shall 
be  governed  by  this  act,  and  shall  be  exempt  from  all  provisions  of  the  instir- 


STATE  OF  NORTH  DAKOTA  49 

ance  laws  of  this  state,  not  only  in  governmental  relations  with  the  state,  but 
for  every  other  purpose,  ami  no  law  hereafter  shall  apply  to  them  unless  they 
lie  expressly  designated  therein.     (1913,  Ch.  191,  Pr.  4.)' 

§  5062.  Benefits.]  Sub-section  1.  Every  society  transacting  business 
under  this  act  shall  provide  for  the  payment  of  death  benefits,  ami  may  provide 
for  the  payment  of  benefits  in  case  of  temporary  or  permanent  physical  dis- 
ability, either  as  the  result  of  disease,  accident,  or  old  age;  provided,  the 
period  of  life  at  which  the  payment  of  benefits  or  disability  <>n  account  of  old 
age  shall  commence,  shall  not  be  under  seventy  years,  ami  may  provide  for 
monuments  or  tombstones  to  the  memory  of  its  deceased  members,  and  for  the 
payment  of  funeral  benefits.  Such  society  shall  have  the  power  to  give  a 
member,  when  permanently  disabled  or  on  attaining  the  age  of  seventy,  all, 
or  such  portion  of  the  face  value  of  his  certificate  as  the  laws  of  the  society 
may  provide;  provided,  that  nothing  in  this  act  contained  shall  be  so  construed 
as  to  prevent  the  issuing  of  benefit  for  a  term  of  years  less  than  the  whole 
of  life,  which  are  payable  upon  the  death  or  disability  of  the  member  occurring 
within  the  term  for  which  the  benefit  certificate  may  be  issued.  Such  society 
shall,  upon  written  application  of  the  member,  have  the  power  to  accept  a  part 
of  the  periodical  contributions  in  cash,  and  charge  the  remainder,  not  exceeding 
one-half  of  the  periodical  contribution,  against  the  certificate  with  interest 
payable  or  compounded  annually  at  a  rate  not  lower  than  four  per  cent,  per 
annum;  provided  that  this  privilege  shall  not  be  granted  except  to  societies 
which  have  readjusted  or  may  hereafter  readjust  their  rates  of  contributions, 
and  to  contracts  affected  by  such  readjustment. 

Sub-section  2.  Any  society  which  shall  show  by  the  annual  valuation  here- 
inafter provided  for  that  it  is  accumulating  and  maintaining  the  reserve  not 
lower  than  the  usual  reserve  computed  by  the  American  Experience  Table  ami 
four  per  cent,  interest,  may  grant  to  its  members  extended  and  paid  up  pro- 
tection, or  such  withdrawal  equities  as  its  constitution  and  laws  may  provide; 
provided,  that  such  grants  shall  in  no  case  exceed  in  value  the  portion  of  the 
reserve  to  the  credit  of  such  members  to  whom  they  are  made.  (1913,  Ch.  191, 
Pr.  5.) 

§  5063.  Beneficiaries.]  The  payment  of  death  benefits  shall  be  confirmed 
(confined)  to  wife,  husband,  relative  by  blood  to  the  fourth  degree,  father-in- 
law,  mother-in-law,  son-in-law,  daughter-in-law,  stepfather,  stepmother,  step- 
children, children  by  legal  adoption,  or  to  a  person  or  persons  dependent  upon 
the  member;  provided,  that  if  after  the  issuance  of  the  original  certificate  the 
member  shall  become  dependent  upon  an  incorporated  charitable  institution, 
he  shall  have  the  privilege  wTith  the  consent  of  the  society  to  make  such  insti- 
tution his  beneficiary.  Within  the  above  restrictions,  each  member  shall  have 
the  right  to  designate  his  beneficiary,  and  from  time  to  time  have  the  same 
changed  in  accordance  with  the  laws,  rules  and  regulations  of  the  society,  and 
no  beneficiary  shall  have  or  obtain  any  vested  interest  in  the  said  benefit  until 
the  same  has  become  due  and  payable  upon  the  death  of  the  said  member; 
provided,  that  any  society  may,  by  its  laws,  limit  the  scope  or  beneficiaries 
within  the  above  classes.      ,  1913,  Oh.  191.  Pr.  6.^1 

Who    is    a    ••dependent"    within    statute    or    rules    defining    beneficiaries 

of  mutual  benefit  societies.     2  L.  P.  A.   (N.  S.)   653;   36  L.  E.  A.   (X.   s. , 

208;  37  L.  P.  A.   (N.  S.)   1191. 


50  INSURANCE  LAWS 

§  506-4.  Qualifications  of  Membership.]  Any  society  may  admit  to 
beneficial  membership  any  person  not  less  than  sixteen  and  not  more  than 
sixty  years  of  age,  who  has  been  examined  by  a  legally  qualified  physician, 
and  whose  examination  has  been  supervised  and  approved  in  accordance  with 
the  laws  of  the  society;  provided,  that  any  beneficiary  member  of  such  society 
who  shall  apply  for  a  certificate  providing  for  disability  benefits,  need  not  be 
required  to  pass  an  additional  medical  examination  therefor.  Nothing  herein 
contained  shall  prevent  such  society  from  accepting  general  or  social  members. 
(1913,  Ch.  191,  Pr.  7.) 

§  5065.  Certificate.]  Every  certificate  issued  by  any  such  society  shall 
specify  the  amount  of  benefit  provided  thereby,  and  shall  provide  that  the 
certificate,  the  charter  or  articles  of  incorporation,  or,  if  a  voluntary  associa- 
tion, the  articles  of  association,  the  constitution  and  laws  of  the  society  and 
the  applications  for  membership  and  medical  examination,  signed  by  the 
applicant,  and  all  amendments  to  each  thereof,  shall  constitute  the  agree- 
ment between  the  society  and  the  member,  and  copies  of  the  same  certified 
by  the  secretary  of  the  society,  or  corresponding  officer,  shall  be  received 
in  evidence  of  the  terms  and  conditions  thereof,  and  any  changes,'  addi- 
tions or  amendments  to  said  charter  or  articles  of  incorporation,  or  articles 
of  association,  if  a  voluntary  association,  constitution  or  laws  duly  made  or 
enacted  subsequent  to  the  issuance  of  the  benefit  certificate  shall  bind  the 
member  and  his  beneficiaries  and  shall  govern  and  control  the  agreement  in  all 
respects  the  same  as  though  such  changes,  additions  or  amendments  had  been 
made  prior  to  and  were  in  force  at  the  time  of  the  application  for  membership. 
(1913,  Ch.  191,  Pr.  8.) 

§  5066.  Funds.]  Sub-section  1.  Any  society  may  create,  maintain,  invest, 
disburse  and  apply  an  emergency,  surplus  or  other  similar  fund  in  accordance 
with  its  laws.  Unless  otherwise  provided  in  the  contract,  such  funds  shall  be 
held,  invested  and  disbursed  for  the  use  and  benefit  of  the  society,  and  no 
member  or  beneficiary  shall  have  or  acquire  individual  rights  therein  or  become 
entitled  to  any  apportionment  or  the  surrender  of  any  part  thereof,  except  as 
provided  in  sub-section  2  of  section  5062.  The  funds  from  which  benefits  shall 
be  paid  and  the  funds  from  which  the  expenses  of  the  society  shall  be  de- 
frayed, shall  be  derived  from  periodical  or  other  payments  by  the  members  of 
the  society  and  accretions  of  said  funds;  provided,  that  no  society,  domestic 
or  foreign,  shall  hereafter  be  incorporated  or  admitted  to  transact  business 
in  this  state  which  does  not  provide  for  stated  periodical  contributions  suf- 
ficient to  provide  for  meeting  the  mortuary  obligations  contracted,  when  valued 
upon  the  basis  of  the  National  Fraternal  Congress  Table  of  Mortality  as. 
adopted  by  the  National  Fraternity  Congress,  August  23,  1S99,  or  any  higher 
standard  with  interest  assumption  not  more  than  four  per  cent,  per  annum, 
nor  write  or  accept  members  for  temporary  or  permanent  disability  benefits 
except  upon  tables  based  upon  reliable  experience,  with  an  interest  assumption 
not  higher  than  four  per  cent,  per  annum.      (1913,  Ch.  191,  Pr.  9.) 

Sub-section  2.  Deferred  payments  or  installments  of  claims  shall  be  con- 
sidered as  fixed  liabilities  on  the  happening  of  the  contingency  upon  which  such 
payments  or  installments  are  thereafter  to  be  paid.'  Such  liability  shall  be  the 
present  value  of  such  future  payments  of  installments  upon  the  rate  of  interest 


STATE  OF  NORTH  DAKOTA  51 

and  mortality  assumed  by  the  society  for  valuation,  and  every  society  shall 
maintain  a  fund  sufficient  to  meet  such  liabilities  regardless  of  proposed  future 
collections  to  meet  any  such  liabilities. 

§  5067.  Investments.]  Every  society  shall  invest  its  funds  only  in  securi- 
ties permitted  by  the  laws  of  this  state  for  the  investment  of  the  assets  of 
life  insurance  companies;  provided,  that  any  foreign  society  permitted  or 
seeking  to  do  business  in  this  state,  which  invests  its  funds  in  accordance  with 
the  laws  of  the  state  in  which  it  is  incorporated  shall  be  held  to  meet  the 
requirements  of  this  act  for  the  investment  of  funds.     (1913,  Ch.  191,  Pr.  10.) 

§  5068.  Distribution  of  Funds.]  Every  provision  of  the  laws  of  the 
society  for  the  payment  by  members  of  such  society,  in  whatever  form  made, 
shall  distinctly  state  the  purpose  of  the  same  and  the  proportion  thereof  which 
may  be  used  for  expenses,  and  no  part  of  the  money  collected  for  mortuary 
of  or  disability  purposes,  or  the  net  accretions  of  either  or  any  of  said  funds 
shall  be  used  for  expenses.      (1913,  Ch.  191,  Pr.  11.) 

Distribution  of  assets  of  insolvent  insurance  company.     L.  R.  A.  97. 

§  5069.  Organization.]  Seven  or  more  persons,  citizens  of  the  United 
States,  and  a  majority  of  whom  are  citizens  of  this  state,  who  desire  to  form 
a  fraternal  benefit  society,  as  denned  by  this  act,  may  make  and  sign  (giving 
their  addresses)  and  acknowledge  before  some  officer  competent  to  take  ac- 
knowledgment of  deeds,  articles  of  incorporation,  in  which  shall  be  stated: 

1st.  The  proposed  corporate  name  of  the  society,  which  shall  not  so  closely 
resemble  the  name  of  any  society  or  insurance  company  already  transacting 
business  in  this  state  as  to  mislead  the  public  or  to  lead  to  confusion. 

2nd.  The  purpose  for  which  it  is  formed — which  shall  not  include  more 
liberal  powers  than  are  granted  by  this  act,  provided,  that  any  lawful,  social, 
intellectual,  education,  charitable,  benevolent,  moral  or  religious  advantages  may 
be  set  forth  among  the  purposes  of  the  society — and  the  mode  in  which  its 
corporate  powers  are  to  be  exercised. 

3rd.  The  names,  residences,  and  official  titles  of  all  the  officers,  trustees, 
directors  or  other  persons  who  are  to  have  and  exercise  the  general  control 
and  management  of  the  affairs  and  funds  of  the  society  for  the  first  year,  or 
until  the  ensuing  election,  at  which  all  such  officers  shall  be  elected  by  the 
supreme  legislative  or  governing  body,  which  election  shall  be  held  not  later 
than  one  year  from  the  date  of  the  issuance  of  the  permanent  certificate. 

Such  articles  of  incorporation  and  duly  certified  copies  of  the  constitution 
and  laws,  rules  and  regulations,  and  copies  of  all  proposed  form  of  benefit 
certificates,  applications  therefor  and  circulars  to  be  issued  by  such  society, 
and  a  bond  in  the  sum  of  five  thousand  dollars,  with  sureties  approved  by  the 
commissioner  of  insurance,  conditioned  upon  the  return  of  the  advance  pay- 
ments, as  provided  in  this  section,  to  applicants,  if  the  organization  is  not 
completed  within  one  year,  shall  be  filed  with  the  commissioner  of  insurance, 
who  may  require  such  further  information  as  he  deems  necessary,  and  if  the 
purposes  of  the  society  conform  to  the  requirements  of  this  act,  and  all  pro- 
visions of  law  have  been  complied  with  the  commissioner  of  insurance  shall 
so  certify  and  retain  and  record  (or  file)  the  articles  of  incorporation,  and 
furnish  the  incorporators  a  preliminary  certificate  authorizing  said  society  to 
solicit  members  as  hereinafter  provided. 


52  [NSURANCE  LAWS 

Upon  receipl  of  said  certificate  from  the  commissioner  of  insurance  said 
society  may  solicit  members  for  the  purpose  of  completing  its  organization 
and  shall  collect  from  each  applicant  the  amount  of  not  less  than  one  regular 
monthly  payment,  in  accordance  with  its  table  of  rates  as  provided  by  its 
constitution  and  laws,  and  shall  issue  to  each  such  applicant  a  receipt  for  the 
amount  so  collected.  But  no  such  society  shall  incur  any  liability  other  than 
for  such  advanced  payments,  nor  issue  any  benefit  certificate  nor  pay  or  allow, 
or  offer  or  promise  to  pay  or  allow  to  any  person  any  death  or  disability  benefit 
until  actual  bona  fide  applications  for  death  benefit  certificates  have  been 
secured  upon  at  least  five  hundred  lives  for  at  least  one  thousand  dollars  each, 
and  all  such  applicants  for  death  benefits  shall  have  been  regularly  examined 
by  legally  qualified  practicing  physicians,  and  certificates  of  such  examinations 
have  been  duly  filed  and  approved  by  the  chief  medical  examiner  of  such 
society;  nor  until  there  shall  be  established  ten  subordinate  lodges  or  branches, 
into  which  said  five  hundred  applicants  have  been  initiated;  nor  until  there 
has  been  submitted  to  the  commissioner  of  insurance,  under  oath  of  the  presi- 
dent and  secretary,  or  corresponding  officers  of  such  society,  a  list  of  such 
applicants,  giving  their  names,  addresses,  date  examined,  date  approved,  date 
initiated,  name  and  number  of  the  subordinate  branch  of  which  each  applicant 
is  a  member,  amount  of  benefits  to  be  granted,  rate  of  stated  periodical  contri- 
butions, which  shall  be  sufficient  to  provide  for  meeting  the  mortuary  obliga- 
tion, contracted,  when  valued  for  death  benefits  upon  the  basis  of  the  National 
Fraternal  Congress  Table  of  Mortality,  as  adopted  by  the  National  Fraternal 
Congress  August  23,  1899,  or  any  higher  standard  at  the  option  of  the  society, 
and  for  disability  benefits  by  tables  based  upon  reliable  experience  and  for 
combined  death  and  permanent  total  disability  benefits  by  tables  based  upon 
reliable  experience,  with  an  interest  assumption  not  higher  than  four  per  cent, 
per  annum:  nor  until  it  shall  be  shown  to  the  commissioner  of  insurance  by 
the  sworn  statement  of  the  treasurer,  or  corresponding  officer  of  such  society 
that  at  least  five  hundred  applicants  have  each  paid  in  cash  at  least  one  regular 
monthly  payment,  as  herein  provided  per  one  thousand  dollars  of  indemnity 
to  be  effected,  which  payments  in  the  aggregate  shall  amount  to  at  least  twenty- 
five  hundred  dollars;  all  of  which  shall  be  credited  to  the  mortuary  or  dis- 
ability fund  on  account  of  such  applicants,  and  no  part  of  which  may  be 
used  for  expenses. 

Said  advanced  payments  shall,  during  the  period  of  organization,  be  held 
in  trust,  and,  if  the  organization  is  not  completed  within  one  year,  as  herein- 
after provided,  returned  to  said  applicants. 

The  commissioner  of  insurance  may  make  such  examination  and  require 
such  further  information  as  lie  deems  advisable,  and,  upon  presentation  of 
satisfactory  evidence  that  the  society  has  complied  with  all  the  provisions  of 
law,  he  shall  issue  to  such  society  a  certificate  to  that  effect.  Such  certificate 
shall  be  prima  facie  evidence  of  the  existence  of  such  society  at  the  date  of 
such  certificate.  The  commissioner  of  insurance  shall  cause  a  record  of  such 
certificate  to  be  made  and  certified  copy  of  such  record  may  be  given  in  evi- 
dence with  like  effect  as  the  original  certificate. 

No  preliminary  certificate  granted  under  the  provisions  of  this  section  shall 

be    valid    after   one    year    from    its   dale,    or    after    such    further    period,    not   ex- 


STATE  OF  NORTH  DAKOTA  53 

eeeding  one  year,  as  may  be  authorized  by  the  commissioner  of  insurance  upon 
cause  shown;  unless  the  five  hundred  applicants  herein  required  have  been 
secured,  and  the  organization  has  been  completed,  as  herein  provided,  and  the 
articles"  of  incorporation  and  all  proceedings  thereunder  shall  become  null  and 
void  in  one  year  from  the  date  of  said  preliminary  certificate,  or  at  the  expira- 
tion of  said  extended  period,  unless  such  society  shall  have  completed  its 
organization  and  commenced  business  as  herein  provided.  When  any  domestic 
society  shall  have  discontinued  business  for  the  period  of  one  year,  or  has  less 
than  four  hundred  members,  its  charter  shall  become  null  and  void. 

Every  such  society  shall  have  the  power  to  make  a  constitution  and  bydaws 
for  the  government  of  the  society,  the  admission  of  its  members,  the  manage- 
ment of  its  affairs,  and  the  fixing  and  readjusting  of  the  rates  of  contribution 
of  its  members  from  time  to  time;  and  it  shall  have  the  power  to  change, 
alter,  add  to,  or  amend  such  constitution  and  by-laws,  and  shall  have  such 
other  powers  as  are  necessary  and  incidental  to  carrying  into  effect  the  objects 
and  purposes  of  the  society.     (1913,  Ch.  191,  Pr.  12.) 

§  5070.  Powers  Retained.  Reincorporation.  Amendments.]  Any 
society  now  engaged  in  transacting  business  in  this  state  may  exercise,  after 
the  passage  of  this  act,  all  of  the  rights  conferred  thereby,  and  all  of  the  rights, 
powers  and  privileges  not  exercised  or  possessed  by  it  under  its  charter  or 
articles  of  incorporation  not  inconsistent  with  this  act,  if  incorporated;  or  if  it 
be  a  voluntary  association  it  may  incorporate  hereunder.  But  no  society  already 
organized  shall  be  required  to  re-incorporate  hereunder,  and  any  such  society 
may  amend  its  articles  of  incorporation  from  time  to  time  in  the  manner  pro- 
vided therein,  or  in  its  constitution  and  laws,  and  all  such  amendments  shall 
be  filed  with  the  commissioner  of  insurance  and  shall  become  operative  upon 
such  filing  unless  a  later  time  be  provided  in  such  amendments,  or  in  its 
articles  of  incorporation,  constitution  or  laws.     (1913,  Ch.  191,  Pr.  13.) 

§  5071.  Mergers  and  Transfers.]  No  domestic  societies  shall  merge 
with  or  accept  the  transfer  of  the  membership  or  funds  of  any  other  society 
unless  such  merger  or  transfer  is  evidenced  by  a  contract  in  writing,  setting  out 
in  full  the  terms  and  conditions  of  such  merger  or  transfer,  and  filed  with  the 
commissioner  of  insurance  of  this  state  together  with  a  sworn  statement  of 
the  financial  condition  of  each  of  said  society  by  its  president  and  secretary, 
or  corresponding  officers,  and  a  certificate  of  such  officers,  duly  verified  under 
oath  of  said  officers  of  each  of  the  contracting  societies  that  such  merger  or 
transfer  has  been  approved  by  a  vote  of  two-thirds  of  the  members  of  the 
supreme  legislative  or  governing  body  of  each  of  said  societies.  Upon  the 
submission  of  said  contract,  financial  statements  and  certificates,  the  commis- 
sioner of  insurance  shall  examine  the  same,  and  if  he  shall  find  such  financial 
statements  to  be  correct  and  said  contract  to  be  in  conformity  with  the  pro- 
visions of  this  section,  and  that  such  merger  or  transfer  is  just  and  equitable 
to  the  members  of  each  of  said  societies  he  shall  approve  said  merger  or  trans- 
fer, issue  his  certificate  to  that  effect,  and  thereupon  the  said  contract  of 
merger  or  transfer  shall  be  of  full  force   and  effect. 

In  case  such  contract  is  not  approved  the  facts  of  its  submission  and  its 
contents  shall  not  be  disclosed  by  the  commissioner  of  insurance.  (1913,  Ch. 
191,  Pr.  14.) 


54  INSUKANCE  LAWS 

§  5072.  Annual  License.]  Societies  which  are  now  authorized  to  transact 
business  in  this  state  may  continue  such  business  until  the  first  day  of  April 
next  succeeding  the  passage  of  this  act,  and  the  authority  of  such  societies 
may  thereafter  be  renewed  annually,  but  in  all  cases  to  terminate  on  the  first 
day  of  the  succeeding  April;  provided,  however,  the  license  shall  continue  in 
full  force  and  effect  until  the  new  license  be  issued  or  specifically  refused. 
For  each  such   license  or  renewal  the  society   shall  pay  the  commissioner  of 

insurance dollars.      A    duly    certified    copy    or 

duplicate  of  such  license  shall  be  prima  facie  evidence  that  the  licensee  is  a 
fraternal  benefit  society  within  the  meaning  of  this  act.  (1913,  Ch.  191,  Pr. 
15.) 

§  5073.  Admission  of  Foreign  Society.]  No  foreign  society  now  trans- 
acting business,  organized  prior  to  the  passage  of  this  act,  which  is  not  now 
authorized  to  transact  business  in  this  state,  shall  transact  any  business  herein 
without  a  license  from  the  commissioner  of  insurance.  Any  such  society  shall 
be  entitled  to  a  license  to  transact  business  within  this  state  upon  filing  with 
the  commissioner  a  duly  certified  copy  of  its  charter  or  articles  of  associa- 
tion, a  copy  of  its  constitution  and  laws,  certified  by  its  secretary  or  corre- 
sponding officer;  a  power  of  attorney  to  the  commissioner  of  insurance  as  here- 
inafter provided;  a  statement  of  its  business  under  oath  of  its  president  and 
secretary,  or  corresponding  officers,  in  the  form  required  by  the  commissioner, 
duly  verified  by  an  examination  made  by  the  supervising  insurance  official  of 
its  home  state  or  other  state  satisfactory  to  the  commissioner  of  insurance  of 
this  state;  a  certificate  from  the  proper  official  in  its  home  state,  province, 
or  country,  that  the  society  is  legally  organized;  a  copy  of  its  contract,  which 
must  show  that  benefits  are  provided  for  by  periodical,  or  other  payments 
by  persons  holding  similar  contracts;  and  upon  furnishing  the  commissioner 
such  other  information  as  he  may  deem  necessary  to  a  proper  exhibit  of  its 
business  and  plan  of  working,  and  upon  showing  that  its  assets  are  invested 
in  accordance  with  the  laws  of  the  state,  territory,  district,  province  or  country 
where  it  is  organized,  he  shall  issue  a  license  to  such  society  to  do  business  in 
this  state  until  the  first  day  of  the  succeeding  April,  and  such  license  shall, 
upon  compliance  with  the  provisions  of  this  act,  be  renewed  annually  but  in 
all  cases  to  terminate  on  the  first  day  of  the  succeeding  April;  provided, 
however,  that  license  shall  continue  in  full  force  and  effect  until  the  new 
license  be  issued  or  specifically  refused.  Any  foreign  society  desiring  admis- 
sion to  this  state  shall  have  the  qualifications  required  of  domestic  societies 
organized  under  this  act  and  have  its  assets  invested  as  required  by  the  laws 
of  the  state,  territory,  district,  country,  or  province  where  it  is  organized.    'For 

each  such  license  or  renewal  the  society  shall  pay  the  commissioner 

dollars.  When  the  commissioner  refuses  to  license  any  society,  or  revokes  its 
authority  to  do  business  in  this  state  he  shall  reduce  his  ruling,  order  or  de- 
cision to  writing  and  file  the  same  in  his  office,  and  shall  furnish  a  copy  thereof, 
together  with  a  statement  of  his  reasons,  to  the  officers  of  the  society,  upon 
request,  and  the  action  of  the  commissioner  shall  be  reviewable  by  proper 
proceedings  in  any  court  of  competent  jurisdiction  within  the  state:  provided, 
however,  that  nothing  contained  in  this  or  the  preceding  section  shall  lie  taken 
or  construed  as  preventing   any   such   society  from   continuing   in    good   faith 


STATE  OF  NORTH  DAKOTA  55 

all  contracts  made  in  tins  state  during  the  time  such  society  was  legally  author- 
ized to  transact  business  herein.     (1913,  Ch.  191,  Pr.  16.) 

§  5074.  Power  of  Attorney  and  Service  op  Process.  |  Every  society, 
whether  domestic  or  foreign,  now  transacting  business  in  this  state,  shall, 
within  thirty  days  after  the  passage  of  this  act,  and  every  said  society  here- 
after applying  for  admission  shall,  before  being  licensed,  appoint  in  writing 
the  commissioner  of  insurance  and  his  successors  in  office  to  be  its  true  and 
lawful  attorney,  upon  whom  all  legal  process  in  any  action  or  proceeding 
against  it  shall  be  served,  and  in  such  writing  shall  agree  that  any  lawful 
process  against  it  which  is  served  upon  such  attorney  shall  be  of  the  same 
legal  force  and  validity  as  if  served  upon  the  society,  and  that  the  authority 
shall  continue  in  force  so  long  as  any  liability  remains  outstanding  in  this 
state. 

Copies  of  such  appointment,  certified  by  said  commissioner  of  insurance, 
shall  be  deemed  sufficient  evidence  thereof  and  shall  be  admitted  in  evidence 
with  the  same  force  and  effect  as  the  original  thereof  might  be  admitted. 
Service  shall  only  be  made  upon  such  attorney,  must  be  made  in  duplicate  upon 
the  commissioner  of  insurance,  or,  in  his  absence,  upon  the  person  in  charge 
of  his  office,  and  shall  be  deemed  sufficient  service  upon  such  society;  provided, 
however,  that  no  such  service  shall  be  valid  or  binding  against  any  such  society 
when  it  is  required  thereunder  to  file  its  answer,  pleading  or  defense,  in  less 
than  thirty  days  from  the  date  of  mailing  the  copy  of  such  service  to  such 
society.  When  legal  process  against  any  such  society  is  served  upon  said  com- 
missioner of  insurance  he  shall  forthwith  forward  by  registered  mail  one  of 
the  duplicate  copies  prepaid  and  directed  to  its  secretary  or  corresponding 
officer.  Legal  process  shall  not  be  served  upon  any  such  society  except  in  the 
manner  provided  herein.     (1913,  Ch.  191,  Pr.  17.) 

$  5075.  Place  of  Meeting,  Location  of  Office.]  Any  domestic  society 
may  provide  that  the  meetings  of  its  legislative  or  governing  body  may  be 
held  in  any  state,  district,  province  or  territory  wherein  such  society  has  sub- 
ordinate branches,  and  all  business  transacted  at  such  meetings  shall  be  as 
valid  in  all  respects  as  if  such  meetings  were  held  in  this  state;  but  its  prin- 
cipal office  shall  be  located  in  this  state.     (1913,  Ch.  191,  Pr.  IS.) 

§  5076.  No  Personal  Liability.]  Officers  and  members  of  the  supreme, 
grand,  or  any  subordinate  body  of  any  such  incorporated  society  shall  not  be 
individually  liable  for  the  payment  of  any  disability  or  death  benefit  provided 
for  in  the  laws  and  agreements  of  such  society,  but  the  same  shall  be  payable 
only  out  of  the  funds  of  such  society  and  in  the  manner  provided  by  its  laws. 
(1913,  Ch.  191,  Pr.  19.) 

Liability  of  members  of  mutual  insurance  company.     32  L.  R.  A.  481. 
Jurisdiction  of  equity  to  enforce  liability  of  member  of  mutual  insurance 

company.    40  L.  R.  A.  (N.  S.)  781. 

§  5077.  Waiver  of  the  Provisions  of  the  Laws.]  The  constitution  and 
laws  of  the  society  may  provide  that  no  subordinate  body,  nor  any  of  its  sub- 
ordinate officers  or  members  shall  have  the  power  or  authority  to  waive  any  of 
the  provisions  of  the  laws  and  constitution  of  the  society,  and  the  same  shall 
be  binding  on  the  society  and  each  and  every  member  thereof  and  on  all  bene- 
ficiaries of  members.     I  1913,  Ch.  191,  Pr. 


56  INSURANCE  LAWS 

§  5078.  Benefit  Not  Attachable.]  No  money  or  other  benefit,  charity, 
or  relief  or  aid  to  be  paid,  provided  or  rendered  by  any  such  society  shal]  be 
liable  to  attachment,  garnishment,  or  other  process,  or  be  seized,  taken,  ap- 
propriated or  applied  by  any  legal  or  equitable  process  or  operation  of  law 
to  pay  any  debt  or  Liability  of  a  member  or  beneficiary,  or  any  other  persos 
who  may  have  a  right  thereunder,  either  before  or  after  payment.  (1913, 
Oh.  L91,  Pr.  210 

§  ill i79.  Constitution  and  Laws.  Amendment.]  Every  society  trans- 
acting business  under  this  act  shall  file  with  the  commissioner  of  insurance  a 
duly  certified  copy  of  all  amendments  of  or  additions  to  its  constitution  and 
laws  within  ninety  days  after  the  enactment  of  the  same.  Printed  copies  of 
the  constitution  and  laws  as  amended,  changed  or  added  to,  certified  by  the 
secretary  or  corresponding  officer  of  the  society  shall  be  prima  facie  evidence 
of  the  legal  adoption  thereof.     (1913,  Ch.  191,  Pr.  22.) 

§  5080.  Annual  Reports.]  Every  society  transacting  business  in  this  state 
shall  annually,  on  or  before  the  first  day  of  March,  file  with  the  commissioner 
of  insurance,  in  such  form  as  he  may  require,  a  statement  under  oath  of  its 
president  and  secretary,  or  corresponding  officers,  of  its  condition  and  standing 
on  the  thirty-first  day  of  December  next  preceding,  and  of  its  transactions  for 
the  year  ending  on  that  date,  and  alsoxshall  furnish  such  other  information  as 
the  commissioner  of  insurance  may  deem  necessary  to  a  proper  exhibit  of  its 
business  and  plan  of  working.  The  commissioner  may  at  other  times  require 
any  further  statement  he  may  deem  necessary  to  be  made  relating  to  such 
society. 

In  addition  to  the  annual  report  herein  required  each  society  shall  annu- 
ally report  to  the  commissioner  a  valuation  of  its  certificates  in  force  on  Decem- 
ber .31st,  last  preceding;  including  those  issued  within  the  year  for  which  the 
report  is  filed,  in  cases  where  the  contributions  for  the  first  year  in  whole  or 
in  part  are  used  for  current  mortality  and  expenses;  provided,  the  first  report 
of  valuation  shall  be  made  as  of  December  31st,  1912.  Such  report  of  valua- 
tion shall  show,  as  contingent  liabilities,  the  present  mid-year  value  of  the 
promised  benefits  provided  in  the  constitution  and  laws  of  such  society  under 
certificates  then  subject  to  valuation;  and,  as  contingent  assets,  the  present  mid- 
year value  of  the  future  net  contributions  provided  in  the  constitution  and 
laws  as  the  same  are  in  practice  actually  collected.  At  the  option  of  any 
society,  in  lieu  of  the  above,  the  valuation  may  show  the  net  value  of  the  cer- 
tificates subject  to  valuation  hereinbefore  provided,  and  said  net  value,  when 
computed  in  case  of  monthly  contributions,  may  be  the  means  of  the  terminal 
values  for  the  end  of  the  preceding  and  of  the  current  insurance  years. 

Such  valuation  shall  be  certified  by  a  competent  accountant  or  actuary,  or. 
at  the  re.juest  and  expense  of  the  society,  verified  by  the  actuary  of  the  de- 
partment of  insurance  of  the  home  stale  of  the  society,  and  shall  be  filed  with 
the  commissioner  of  insurance  within  ninety  days  after  the  submission  of  the 
last  preceding  annual  report.  The  legal  minimum  standard  of  valuation  for 
all  certificates,  except  for  disability  benefits,  shall  be  the  National  Fraternal 
Congress  Table  of  Mentality  as  adopted  by  the   National    Fraternal  Congress 

August   23,   1899,   or.   al    the   option   of   the   society,   any   higher   table;    or   at    its 
option    it   may   use  a   table  based   upon    the  society's   own   experience1  of   at    least 


STATE  OF  NORTH  DAKOTA  57 

twenty  years  and  covering  not  less  than  one  hundred  thousand  lives  with  in- 
terest assumption  not  more  than  four  per  cent,  per  annum.  Each  such  valuation 
report  shall  set  forth  clearly  and  fully  the  mortality  and  interest  bases  and 
the  method  of  valuation.  Any  society  providing  for  disability  benefits  shall 
keep  the  net  contributions  for  such  benefits  in  a  fund  separate  and  apart  from 
all  other  benefit  and  expense  funds  and  the  valuation  of  all  other  business  of 
the  society;  provided,  that  where  a  com] lined  contribution  table  is  used  by 
a  society  for  both  death  and  permanent  total  disability  benefits  the  valuation 
shall  be  according  to  tables  of  reliable  experience,  and  in  such  case  a  separation 
of  the  funds  shall  not  be  required. 

The  valuation  herein  provided  for  shall  not  be  considered  or  regarded  as 
a  test  of  the  financial  solvency  of  the  society,  but  each  society  shall  be  held 
to  be  legally  solvent  so  long  as  the  funds  in  its  possession  are  equal  to  or  in 
excess  of  its  matured  liabilities. 

Beginning  with  the  year  1914  a  report  of  such  valuation  and  an  explana- 
tion of  the  facts  concerning  the  condition  of  the  society  thereby  disclosed  shall 
be  printed  and  mailed  to  each  beneficiary  member  of  the  society  not  later  than 
June  1st  of  each  year;  or,  in  lieu  thereof,  such  report  of  valuation  and  show- 
ing of  the  society's  condition  as  thereby  disclosed  may  be  published  in  the 
society's  official  paper  and  the  issue  containing  the  same  mailed  to  each  bene- 
ficiary member  of  the  society.  The  laws  of  such  society  shall  provide  that  if 
the  stated  periodical  contributions  of  the  members  are  insufficient  to  pay  all 
matured  death  and  disability  claims  in  full,  and  to  provide  for  the  creation 
and  maintenance  of  the  funds  required  by  its  laws,  additional,  increased,  or 
extra  rates  of  contribution  shall  be  collected  from  the  members  to  meet  such 
deficiency;  and  such  laws  may  provide  that,  upon  the  written  application  or 
consent  of  the  member,  his  certificate  may  be  charged  with  its  proportion  of 
any  deficiency  disclosed  by  valuation,  with  interest  not  exceeding  five  per 
centum  per  annum.     (1913,  Ch.  191,  Pr.  23.) 

§  5081.  Provisions  to  Insure  Future  Security.]  If  the  valuation  of 
the  certificates,  as  hereinbefore  provided,  on  December  31,  1917,  shall  show 
that  the  present  value  of  future  net  contributions,  together  with  the  admitted 
assets,  is  less  than  the  present  value  of  the  promised  benefits  and  accrued 
liabilities  such  society  shall  thereafter  maintain  said  financial  condition  at  each 
succeeding  triennial  valuation  in  respect  of  the  degree  of  deficiency,  as  shown 
in  the  valuation  as  of  December  31,  1917.  If  at  any  succeeding  triennial 
valuation  such  society  does  not  show  at  least  the  same  condition  the  commis- 
sioner shall  direct  that  it  thereafter  comply  with  the  requirements  herein 
specified.  If  the  next  succeeding  triennial  valuation  after  the  receipt  of  such 
notice  shall  show  that  the  society  has  failed  to  maintain  the  condition  required 
herein  the  commissioner  may,  in  the  absence  of  good  cause  shown  for  such 
failure,  institute  proceedings  for  the  dissolution  of  such  society,  in  accordance 
with  the  provisions  of  section  5083,  or  in  the  case  of  a  foreign  society,  its 
license  may  be  canceled  in  the  manner  provided   in  this  act. 

Any  such  society,  shown  by  any  triennial  valuation,  subsequent  to  December 
31,  1917,  not  to  have  maintained  the  condition  herein  required,  shall  within 
two  years  thereafter  make  such  improvement  as  to  show  a  |  ercentage  of 
deficiency  not  greater  than   as  of  December   31,    1917.   or   thereafter,   as   to   all 


58  INSURANCE  LAWS 

new  members  admitted,  be  subject,  so  far  as  stated  rates  of  contributions  are 
concerned,  to  the  provisions  of  section  5069,  applicable  in  the  organization  of 
new  societies;  provided,  that  the  net  mortuary  or  beneficial  contributions  and 
funds  of  such  new  members  shall  be  kept  separate  and  apart  from  the  other 
funds  of  the  society.  Tf  such  required  improvement  is  not  shown  by  the  suc- 
ceeding triennial  valuation  then  the  said  new  members  may  be  placed  in  a 
separate  class,  and  their  certificates  valued  as  an  independent  society  in  respect 
of  contributions  and  funds.      (1913,  Ch.   191,  Pr.  23a.) 

§  50S2.  Alternative  Provisions.]  In  lieu  of  the  requirements  of  sections 
5080  and  5081,  any  society  accepting  in  its  laws  the  provisions  of  these  sections 
may  value  its  certificates  on  a  basis  herein  designated  "accumulation  basis" 
by  crediting  each  member  with  the  net  amount  contributed  for  each  year  with 
interest  at  approximately  the  net  rate  earned  and  by  charging  him  with  his 
share  of  the  losses  for  each  year,  herein  designated  ' '  cost  of  insurance, ' '  and 
carrying  the  balance,  if  any,  to  his  credit.  The  charge  for  the  cost  if  insur- 
ance may  be  according  to  the  actual  exrjerience  of  the  society  applied  to  a 
table  of  mortality  recognized  by  the  law  of  this  state,  and  shall  take  into  con- 
sideration the  amount  at  risk  during  each  year,  which  shall  be  the  amount  pay- 
able at  death  less  the  credit  to  the  member.  Except  as  specifically  provided  in 
its  articles  or  laws  or  contracts  no  charge  shall  be  carried  forward  from  the 
first  valuation  hereunder  against  any  member  for  any  past  share  of  losses 
exceeding  the  contributions  and  credit.  If,  after  the  first  valuation,  any 
member's  share  of  losses  for  any  year  exceeds  his  credit  including  the  contri- 
bution for  the  year  the  contribution  shall  be  increased  to  cover  his  share  of 
the  losses.  Any  such  excess  share  of  losses  chargeable  to  any  member  may 
be  paid  out  of  a  fund  or  contributions  especially  created  or  required  for  such 
purpose. 

Any  member  may  transfer  to  any  place  adopted  by  the  society  with  net 
rates  on  which  tabular  reserves  are  maintained  and  on  such  transfer  shall  be 
entitled  to  make  such  application  of  his  credit  as  provided  in  the  laws  of  the 
society. 

Certificate  issued,  re-rated  or  re-adjusted  on  a  basis  providing  for  adequate 
rate  with  adequate  reserves  to  mature  such  certificates  upon  assumption  for 
mortality  and  interest  recognized  by  the  law  of  this  state  shall  be  valued  on 
such  basis,  herein  designated  the  "Tabular  Basis;"  provided,  that  if  on  the 
first  valuation  imder  this  section  a  deficiency  in  reserve  shall  be  shown  for  any 
such  certificate  the  same  shall  be  valued  on  the  accumulative  basis. 

Whenever  in  any  society  having  members  upon  the  tabular  basis  and  upon 
the  accumulation  basis  the  total  of  all  costs  of  insurance  provided  for  any  year 
shall  be  insufficient  to  meet  the  actual  death  and  disability  losses  for  the  year 
the  deficiency  shall  be  met  for  the  year  from  the  available  funds  after  setting 
aside  all  credits  in  the  reserve;  or  from  increased  contributions,  or  by  an 
increase  in  the  number  of  assessments  applied  to  the  society  as  a  whole,  or  to 
classes  of  members  as  may  be  specified  in  its  laws.  Savings  from  a  lower 
amount  of  death  losses  may  be  returned  in  like  manner  as  may  be  specified  in 
its  laws. 

If  the  laws  of  the  society  so  provide  the  assets  representing  the  reserves 
of  any  separate  cluss  of  members  may  be  carried  separately    for   such   class  as 


STATE  OF  NORTH  DAKOTA  59 

if  an  independent  society,  and  the  required  reserve  accumulation  of  such 
class  so  set  apart  shall  not  thereafter  be  mingled  with  the  assets  of  other 
classes  of  the  society. 

A  table  showing  the  credits  to  individual  members  for  each  age  and  year 
of  entry  and  showing  opposite  each  credit  the  tabular  reserve  required  on  the 
whole  life  or  other  plan  of  insurance  specified  in  the  contract,  according  to 
assumptions  for  mortality  and  interest  recognized  by  the  law  of  this  state  and 
adopted  by  the  society,  shall  be  filed  by  the  society  with  each  annual  report, 
and  also  be  furnished  to  each  member  before  July  1st  of  each  year. 

In  lieu  of  the  aforesaid  statement  there  may  be  furnished  to  each  member 
within  the  same  time  a  statement  giving  the  credit  for  such  member,  and  giving 
the  tabular  reserve  and  level  rate  required  for  a  transfer  carrying  out  the 
plan  of  insurance  specified  in  the  contract.  No  table  or  statement  need  be 
made  or  furnished  where  the  reserves  are  maintained  on  the  tabular  basis. 

For  this  purpose  individual  bookkeeping  accounts  for  each  member  shall 
not  be  required,  and  all  calculations  may  be  made  by  actuarial  methods. 

Nothing  herein  contained  shall  prevent  the  maintenance  of  such  surplus 
over  and  above  the  credits  on  the  accumulation  basis  and  the  reserves  on  the 
tabular  basis  pursuant  to  its  law;  nor  be  construed  as  giving  to  the  individual 
member  any  right  or  claim  to  any  such  reserve  or  credit  other  than  in  manner 
as  expressed  in  the  contract  and  its  laws;  nor  as  making  any  such  reserve  or 
credits  a  liability  in  determining  the  legal  solvency  of  the  society.  (1913,  Ch. 
191,  Pr.  23b.) 

§  5083.  Examination  of  Domestic  Societies.]  The  commissioner  of 
insurance,  or  any  person  he  may  appoint,  shall  have  the  power  of  visitation 
and  examination  into  the  affairs  of  any  domestic  society.  He  may  employ 
assistants  for  the  purpose  of  such  examination,  and,  he,  or  any  person  he  may 
appoint,  shall  have  free  access  to  all  the  books,  papers  and  documents  that 
relate  to  the  business  of  the  society,  and  may  summon  and  qualify  as  witness 
under  oath  and  examine  its  officers,  agents  and  employees,  or  other  persons 
in  relation  to  the  affairs,  transactions  and  condition  of  the  society.  The  ex- 
pense of  such  examination  shall  be  paid  by  the  society  examined  upon  state- 
ment furnished  by  the  commissioner  of  insurance,  and  the  examination  shall 
be  made  at  least  once  in  three  years. 

Whenever,  after  examination,  the  commissioner  of  insurance  is  satisfied 
that  any  domestic  society  has  failed  to  comply  with  any  provisions  of  this  act, 
or  is  exceeding  its  powers,  or  is  not  carrying  out  its  contracts  in  good  faith, 
or  is  transacting  business  fraudulently;  or  whenever  any  domestic  society,  after 
the  existence  of  one  year  or  more,  shall  have  a  membership  of  less  than  400 
(or  shall  determine  to  discontinue  business)  the  commissioner  of  insurance  may 
present  the  facts  relating  thereto  to  the  attorney  general,  who  shall,  if  he 
deems  the  circumstances  warrant,  commence  an  action  in  quo  warranto  in  a 
court  of  competent  jurisdiction,  and  such  court  shall  thereupon  notify  the 
officers  of  such  society  of  a  hearing,  and  if  it  shall  then  appear  that  such 
society  should  be  closed,  said  society  shall  be  enjoined  from  carrying  on  any 
further  business  and  some  person  shall  be  appointed  receiver  of  such  society. 
and  shall  proceed  at  once  to  take  possession  of  the  books,  papers,  moneys, 
and  other  assets  of  the  society,  and  shall  forthwith,  under  the  direction  of  the 


GO  INSURANCE  LAWS 

court,  proceed  to  close  the  affairs  of  the  society  and  to  distribute  its  funds  to 
those  entitled  thereto. 

No  such  proceedings  shall  be  commenced  by  the  attorney  general  againffl 
any  such  society  until  after  notice  lias  been  duly  served  on  the  chief  executive 
officers  of  the  society  and  a  reasonable  opportunity  given  to  it  on  a  date  to  be 
named  in  said  notice  to  show  cause  why  such  proceedings  should  not  be  com- 
menced.    (1913,  Ch.  191,  Pr.  24.) 

§  5084.  Api'ltcation  for  Receiver,  Etc.]  No  application  for  injunction 
against  or  proceedings  for  the  dissolution  of  or  the  appointment  of  a  receiver 
for  any  such  domestic  society  or  branch  thereof  shall  be  entertained  by  any 
court  in  this  state  unless  the  same  is  made  by  the  attorney  general.  (1913,  Ch. 
191,  Pr.  25.) 

§  5085.  Examination  op  Foreign  Societies.]  The  commissioner  of  insur- 
ance, or  any  person  whom  he  may  appoint,  may  examine  any  foreign  society 
transacting  or  applying  for  admission  to  transact  business  in  this  state.  The 
said  commissioner  may  employ  assistants,  and  he,  or  any  person  he  may  appoint. 
shall  have  free  access  to  all  the  books,  papers  and  documents  that  relate  to  the 
business  of  the  society,  and  may  summon  and  qualify  as  witness  under  oath 
and  examine  its  officers,  agents  and  employees  and  other  persons  in  relation  to 
the  affairs,  transactions  and  conditions  of  the  society.  He  may,  in  his  dis- 
cretion, accept  in  lieu  of  such  examination  the  examination  of  the  insurance 
department  of  the  state,  territory,  district,  province  or  country  where  such 
society  is  organized.  The  actual  expenses  of  examiners  making  any  such 
examination  shall  be  paid  by  the  society  upon  statement  furnished  by  the 
commissioner  of  insurance. 

If  any  such  society,  or  its  officers,  refuse  to  submit  to  such  examination, 
or  to  comply  with  the  provisions  of  the  section  relative  thereto,  the  authority 
of  such  society  to  write  new  business  in  this  state  shall  be  suspended  or  license 
refused  until  satisfactory  evidence  is  furnished  the  commissioner  relating  to 
the  condition  and  affairs  of  the  society,  and  during  such  suspension  the  society 
shall  not  write  new  business  in  this  state.     (1913,  Ch.  191,  Pr.  26.) 

§  5086.  No  Adverse  Publications.]  Pending,  during  or  after  an  exam- 
ination or  investigation  of  any  such  society,  either  domestic  or  foreign,  the 
commissioner  of  insurance  shall  make  public  no  financial  statement,  report,  or 
finding,  nor  shall  he  permit  to  become  public  any  financial  statement,  report 
or  finding  affecting  the  status,  standing  or  rights  of  any  such  society  until  a 
copy  thereof  shall  have  been  served  upon  such  society  at  its  home  office,  nor 
until  such  society  shall  have  been  afforded  a  reasonable  opportunity  to  answer 
any  such  financial  statement,  report  or  finding,  and  to  -make  such  showing 
in  connection  therewith  as  it  may  desire.      (1913,  Ch.  191,  Pr.  27.) 

§  5087.  Revocation  of  License.]  When  the  commissioner  of  insurance, 
on  investigation,  is  satisfied  that  any  foreign  society  transacting  business  under 
this  act  has  exceeded  its  powers,  or  has  failed  to  comply  with  any  provisions 
of  this  act,  or  is  conducting  business  fraudulently,  or  is  not  carrying  out  its 
contracts  'ii  good   faith,  he  shall   notify  the  society  of  his  findings,  and   state   in 

writing  the  grounds  of  his  dissatisfaction,  and  after  reasonable  notice  require 
said  society,  on  a  date  named,  to  show  cause  why  its  license  should  not  be 
revoked.      If   on    the   date    named    in    said    notice   such    objections   have   not    been 


STATE  OF  NOKTH  DAKOTA  61 

removed  to  the  satisfaction  of  the  said  commissioner  of  insurance,  or  the 
society  does  not  present  good  and  sufficient  reasons  why  its  authority  to  trans- 
act business  in  this  state  should  not  at  that  time  be  revoked,  he  may  revoke 
the  authority- of  the  society  to  continue  business  in  this  state.  All  decisions 
ami  findings  of  the  commissioner  made  under  the  provisions  of  this  section 
may  be  reviewed  by  the  proper  proceedings  in  any  court  of  competent  juris- 
diction, as  provided  in  section  5073.     (1913,  Ch.  191,  Pr.  28.) 

§  5088.  Exemption  of  Certain  Societies.]  Nothing  contained  in  tins 
act  shall  be  construed  to  effect  or  apply  to  grand  or  subordinate  lodges  of 
Masons,  Odd  Fellows  or  Knights  of  Pythias  (exclusive  of  the  insurance  de- 
partment of  the  Supreme  Lodge  Knights  of  Pythias),  and  the  Junior  Order 
of  the  United  American  Mechanics  (exclusive  of  the  beneficiary  degree  of 
insurance  branch  of  the  National  Council  Junior  Order  United  American 
Mechanics),  or  societies  which  limit  their  membership  to  any  one  hazardous 
occupation,  nor  to  similar  societies  which  do  not  issue  insurance  certificates, 
nor  to  an  association  of  local  lodges  of  a  society  now  doing  business  in  this 
state,  which  provides  death  benefits  not  exceeding  five  hundred  dollars  to  any 
one  person,  or  disability  benefits  not  exceeding  three  hundred  dollars  in  any 
one  year  to  any  one  person,  or  both,  nor  to  any  contracts  of  reinsurance  business 
on  such  plan  in  this  state,  nor  to  domestic  societies  which  limit  their  member- 
ship to  the  employees  of  a  particular  city  or  town,  designated  firm,  business 
house,  or  corporation,  nor  to  domestic  lodges,  orders,  or  association  of  a  purely 
religious,  charitable  and  benevolent  description,  which  do  not  provide  for  a 
death  benefit  of  more  than  one  hundred  dollars,  or  for  disability  benefits  of 
more  than  one  hundred  and  fifty  dollars  to  any  one  person  in  any  one  year. 
The  commissioner  of  insurance  may  require  from  any  such  society  such  informa- 
tion as  will  enable  him  to  determine  whether  such  society  is  exempt  from  the 
provisions  of  this  act. 

Any  fraternal  benefit  society,  heretofore  organized  ami  incorporated  and 
operating  within  the  definition  set  forth  in  sections  5059,  5060  and  5061  of 
this  article,  providing  for  benefits  in  case  of  death  or  disability  resulting 
solely  from  accidents,  but  which  does  not  obligate  itself  to  pay  death  or  sick 
benefits,  may  be  licensed  under  the  provisions  of  this  act.  and  shall  have  all 
tin'  privileges  and  shall  be  subject  to  all  the  provisions  and  regulations  of  this 
act,  except  that  the  provisions  of  this  act  requiring  medical  examinations, 
valuations  of  benefit  certificates,  and  that  the  certificate  shall  specify  the 
amount  of  benefits,  shall  not  apply  to  such  society.      |  1913,  Ch.  191,  Pr.  29.) 

§  5089.  Taxation.]  Every  fraternal  benefit  society  organized  or  licensed 
under  this  act  is  hereby  declared  to  be  a  charitable  and  benevolent  institution, 
and  all  of  its  funds  shall  be  exempt  from  all  and  every  state,  county,  district, 
municipal,  and  school  tax,  other  than  taxes  on  real  estate  and  office  equipment. 
(1913,   Ch.   191.   Pr.   30.) 

Fraternal  benefit  society  as  a  benevolent  or  charitable  association  within 

exemption  statutes.     7  L.  P.  A.   (X.  S.)   380. 

§  5090.  Penalties.]  Any  person,  officer,  member  or  examining  physician 
of  any  society  authorized  to  do  business  under  this  article  shall  knowingly  or 
willfully  make  any  false  or  fraudulent  statement  or  representation  in  or  with 
reference   to  any   application    for  membership,  or   for  the   purpose   of   obtaining 


62  INSURANCE  LAWS 

mono)-  from  or  benefit  in  any  society  transacting  business  under  this  act,  shall 
be  guilty  of  a  misdemeanor,  and  upon  conviction  thereof  shall  be  punished  by 
a  fine  of  not  less  than  one  hundred  dollars  nor  more  than  five  hundred  dollars, 
or  imprisonment  in  the  county  jail  for  not  less  than  thirty  days  nor  more  than 
one  year,  or  both,  in  the  discretion  of  the  court;  and  any  person  who  shall 
willfully  make  a  false  statement,  of  any  material  fact  or  thing  in  a  sworn  state- 
ment as  to  the  death  or  disability  of  a  certificate  holder  in  any  such  society 
for  the  purpose  of  procuring  payment  of  a  benefit  named  in  the  certificate  of 
such  holder,  and  any  person  who  shall  willfully  make  any  false  statement  in 
any  verified  report  or  declaration  under  oath  required  or  authorized  by  this 
state,  shall  be  guilty  of  perjury,  and  shall  be  proceeded  against  and  punished 
as  provided  by  the  statutes  of  this  state  in  relation  to  the  crime  of  perjury. 

Any  person  who  shall  solicit  membership  for,  or  in  any  manner  assist  in 
procuring  membership  in  any  fraternal  benefit  society  not  license*  to  do 
business  in  this  state,  or  who  shall  solicit  membership  for,  or  in  any  manner 
assist  in  procuring  membership  in  any  such  society  not  authorized,  as  herein 
provided,  to  do  business,  as  herein  defined  in  this  state,  shall  be  guilty  of  a 
misdemeanor,  and  upon  conviction  thereof  shall  be  punished  by  a  fine  of  not 
less  than  fifty  or  more  than  two  hundred  dollars. 

Any  society,  or  any  officer,  agent  or  employee  thereof  neglecting  or  refusing 
to  comply  with,  or  violating  any  of  the  provisions  of  this  act,  the  penalty  for 
which  neglect,  refusal  or  violation  is  not  specified  in  this  section,  shall  be 
fined  not  exceeding  two  hundred  dollars  upon  conviction  thereof.  (1913,  Ch. 
191,  Pr.  31.) 


CHAPTER  77. 
Insurance  in  General. 

Article    1.     Definition  of  insurance,  6458. 

2.  What  may  be  insured,  6459-6460a. 

3.  Parties  to  the  contract,  6461-6465. 

4.  Insurable  interest,  6466-6479. 

5.  Concealment  and  representation,  6480-6502. 

6.  The  policy,  6503-6518. 

7.  Warranties,  6519-6528. 

8.  Premium,   6529-6536. 

9.  Loss.  6537-6540. 

10.  Notice  of  loss,  6541-6546. 

11.  Double  insurance,  6547-6548. 

12.  Reinsurance,   6549-6552. 

Article  1 — Definition  of  Insurance. 
§  6458.     Defined.]      Insurance   is  a  contract    whereby   one   undertakes  to 
indemnify  another  against  loss,  damage  or  liability  arising  from  an   unknown 
or  contingent  event.     (R.  C.  1905,  §  5890.) 

Corporation  undertaking  to  guarantee  fixed  revenue  per  acre  for  farm 
lands  is  an  insurance  company  within  statute.  State  v.  Hogan,  8  N.  D. 
301.  78  N.  W.  1051,  73  A.  S.  R.  759,  45  L.  R.  A.  166. 


STATE  OF  NORTH  DAKOTA  63 

Insurer  is  entitled  to  such  interpretation  of  clause  making  policy  void 
because  of  increase  of  hazard  occasioned  by  insured  as  will  include  mortgage 
place  upon  property  insured.  Lawyer  v.  Globe  Mut.  Ins.  Co.,  25  S.  D. 
549,  127  N.  W.  615. 

What  constitutes  insurance.     47  L.  R.  A.  (N.  S.)  290. 

Article  2 — What  May  be  Insured. 

§  6459.  Insurable  Interest.]  Any  contingent  or  unknown  event,  whether 
past  or  future,  which  may  damnify  a  person  having  an  insurable  interest  or 
create  a  liability  against  him  may  be  insured  against,  subject  to  the  provisions 
of  this  chapter,  with  the  exception  of  an  insurance  for  or  against  the  drawing 
of  any  lottery  or  for  or  against  any  chance  or  ticket  in  a  lottery  drawing  a 
prize.     (R.  C.  1905,  §  5891.) 

§  6460.     Insurance  Classified].     The  most  usual  kinds  of  insurance  are: 

1.  Marine  insurance. 

2.  Fire  insurance. 

3.  Life  insurance. 

4.  Health   insurance;    and 

5.  Accident  insurance.     (R.  C.  1905,  $  5892.) 

§  6460a.  All  Kinds  Subject  to  Chapter.]  All  kinds  of  insurance  are 
subject  to  the  provisions  of  this  chapter.     (R.  C.  1905,  §  5893.) 

Mutual  fire  insurance  company  is  as  effectively  bound  by  section  1849 
(6515  herein)  as  an  insurance  company  organized  on  any  other  basis. 
Peever  Mercantile  Co.  v.  State  Mut.  F.  Ins.  Co.,  25  S.  D.  406,  127  N.  W.  559. 

Article  3 — Parties  to  the  Contract. 

§  6461.  Insurer  and  Insured  Defined.]  The  person  who  undertakes  to 
indemnify  another  by  a  contract  of  insurance  is  called  the  insurer  and  the 
person  indemnified  is  called  the  insured.     (R.  C.  1905,  §  5894.) 

§  6462.  Who  May  Insure.]  Any  one  who  is  capable  of  making  a  eon- 
tract  may  be  an  insurer,  subject  to  the  restrictions  imposed  by  special  statutes 
upon  foreign  corporations,  non-residents  and  others.     (R.  C.  1905,  §  5895.) 

§  6463.  Who  May  be  Insured.]  Any  one  except  a  public  enemy  may  be 
insured.     (R,  C.  1905,  §  5896.) 

§  6464.  Insurance  of  Mortgaged  Property.]  When  a  mortgagor  of 
property  effects  insurance  in  his  own  name,  providing  that  the  loss  shall  be 
payable  to  the  mortgagee,  or  assigns  a  policy  of  insurance  to  the  mortgagee, 
the  insurance  is  deemed  to  be  upon  the  interest  of  the  mortgagor,  who  does 
not  cease  to  be  a  party  to  the  original  contract  and  any  act  of  his  which 
would  otherwise  avoid  the  insurance  will  have  the  same  effect,  although  the 
property  is  in  the  hands  of  the  mortgagee.     (R.  C.  1905,  §  5897.) 

Failure   to   give   notice   under   mortgage   clause   agreement   of   material 

changes  in  property  will  avoid  policy.     Ormsby  v.  Ins.  Co.,  5  S.  D.   72,  58 

N.  W.  301. 

Liability   of  mortgagee   for  premium.      St.   Paul   Ins.   Co.   v.    Upton,    2 

N.  D.  229,  50  N.  W.  702. 

Mortgagee   to  whom   policy   is   made   payable   may   sue   alone   when   his 

claims  exceed  amount  of  insurance.     Travelers'  Ins.  Co.  v.  Ins.  Co.,   1  N. 

D.   151,  45  N.  W.   703. 


64  [NSURANCE  LAWS 

Application  of  proceeds  of  insurance  on  mortgaged  premises.     118  Am. 
St.  Ron.  968. 

Forfeiture  of  insurance  as  against  mortgagees  for  breach  of  condition. 
58  Am.  St.  "Rep.  667. 

Rights  of  mortgagee  under  an   insurance  on   the   mortgaged    property. 
54  Am.  Dec.  693. 

§  6465.  Same.  New  Contract.]  If  an  insurer  assents  to  the  transfer  of 
au  insurance  from  a  mortgagor  to  a  mortgagee  and  at  the  time  of  his  assent 
imposes  further  obligations  on  the  assignee,  making  a  new  contract  with  him, 
the  acts  of  the  mortgagor  cannot  affect  his  right.      (R.  C.  1905,  §   5898.) 

Article    4 — Insurable    Interest. 

§  6466.  Defined.]  Every  interest  in  the  property,  or  any  relation  thereto, 
or  liability  in  respect  thereof  of  such  a  nature  that  a  contemplated  peril  might 
directly  damnify  the  insured  is  an  insurable  interest.      (R.  C.  1905,  §  5899.) 

What  is  insurable  interest  in  property.     7  Am.  Dec.  42;  20  Am.  Dec.  510. 

Insurable   interest  in    unfinished   building   during   its   construction   by   a 
contractor.     43  L.  R.  A.  664. 

— Of   sole   and    absolute   owner   of    building  and   land    not   belonging   to 
him.     38  L.  R.  A.  (N.  S.)  429. 

— Of    one   secondarily    liable   on    an    obligation,    in    property    primarily 
charged  with  the  same.     9  L.  R.  A.   (N.  S.)   490. 

— Of  tenant  in  leased  property.     42  L.  R,  A.   (N.  S.)    135. 

— Of  husband   in   wife's   property,    or    that    in   which   she    is    interested. 
66  L.  R.  A.  658. 
§   6467.     Classified.]      An  insurable  interest   in  property   may   consist    in: 

1.  An   existing  interest. 

2.  An  inchoate  interest  founded  on   an  existing  interest:    or, 

3.  An  expectancy  coupled  with  an  existing  interest  in  that  out  of  which 
the  expectancy  arises.     (R.  C.  1905,  §  5900.) 

§  6468.  Carrier  or  Depositary  Has.]  A  carrier  or  depositary  of  any 
kind  has  an  insurable  interest  in  a  thing  held  by  him  as  such  to  the  extent 
of  its  value.      (R,  C.  1905,  §  5901.) 

§  6469.  Contingent  or  Expectant  Interest  Not.]  A  mere  contingent 
or  expectant  interest  in  anything,  not  founded  on  an  actual  right  to  the  thing, 
nor  upon  valid  contract  for  it,  is  not  insurable.      (  R.  C.  1905,  §  5902.) 

§  6470.  MEASURE  ok.  ]  The  measure  of  an  insurable  interest  in  pro;  erty 
is  the  extent  to  which  the  insured  might  be  damnified  by  loss  or  injury  thereof. 
(R.  ('.  1905,  $  5903. 

§  6471.  [NSURANCE  WITHOUT  INTEREST  VOID.  |  The  sole  object  of  insur- 
ance is  the  inch  mnity  of  the  insured  and  if  he  has  no  insurable  interest  the 
contract  is  void.      (R.  C.  1905,  §  5904.) 

Insurable   interest   in   the  life  of  another,   and    necessity   of.      Am.   Dec. 

93;   46  Am.  Rep.  189;   52   Am.    Rep.   135;    58   Am.   Rep.   852;    L28   Am.   St. 

Rep.  302. 

When  life  insurance  regarded  as  wagering  contract  because  of  the  small 

insurable  interest.     60  Am.  Rep.  729. 

Insurance   ''I'm-    whom    it    may    concern.  16    Am.    Dec    .">2.">. 


STATPJ  OF  NOETH  DAKOTA  65 

§  6472.  When  Interest  Must  Exist.]  Ah  interest  insured  must  exist 
when  the  insurance  takes  effect  and  when  the  loss  occurs,  but  need  not  exist 
in  the  meantime.     (R,  C.  1905,  §  5905.) 

Company   not  liable   if  insured  had    no   interest   in   insured   property   at 

time  of  loss.     Tierney  v.  Ins.  Co.,  4  N.  D.  565,  62  N.  W.  642j   Ormsby  v. 

Ins.  Co.,  S.  D.  72,  58*  N.  W.  301. 

Immaterial   variance  as  to  incumbrance,   value   or   size   of   property  will 

not  vitiate  policy.     McNamara  v.  Ins.  Co.,  1  S.  D.  342,  47  N.  W.  288. 

When  insurable  interest  must  exist  under  fire  policies.     52  L.  R.  A.  330. 

§  6473.  When  Change  of  Interest  Suspends  Insurance.]  Except  in 
the  cases  specified  in  the  next  five  sections  and  in  the  cases  of  life,  accident 
and  health  insurance,  a  change  of  interest  in  any  part  of  a  thing  insured,  un- 
accompanied by  a  corresponding  change  of  interest  in  the  insurance,  suspends 
the  insurance  to  an  equivalent  extent,  until  the  interest  in  the  thingv  and  the 
interest  in  the  insurance  are  vested  in  the  same  person.  (R.  C.  1905,  §  5906.) 
When  sale  or  alienation  of  property  avoids  insurance.     28  Am.  Dec.  154. 

§  6474.  Change  After  Loss  Does  Not  Affect.]  A  change  of  interest 
in  a  tiling  insured  after  the  occurrence  of  an  injury  which  results  in  a  loss 
does  not  affect  the  right  of  the  insured  to  indemnity  for  the  loss.  (R.  C. 
1905,    §    5907.) 

§  6475.  Change  in  One  of  Several  Things.]  A  change  of  interest  in  one 
or  more  of  several  distinct  things  insured  by  one  policy  does  not  avoid  the 
insurance  as  to  the  others.     (R.  C.  1905,  §  5908.) 

§  6476.  Incumbrance  or  Reinsurance  of  One  of  Several  Things.]  The 
procurement  of  any  other  contract  of  insurance  upon  or  the  incumbrance  of 
one  or  more  of  the  several  distinct  things  insured  by  one  policy  does  not 
render  void  any  insurance  upon  the  things  not  covered  by  such  other  contract 
of  insurance  or  incumbrance;  but  in  case  of  loss  or  damage  such  an  amount 
shall  be  deducted  from  the  insurance  as  the  value  of  the  property  so  incum- 
bered or  doubly  insured  bears  to  the  value  of  all  the  property  covered  by  the 
policy.  Any  agreement  made  to  waive  the  provisions  of  this  or  the  preceding 
section  is  void.     (R.  C.  1905,  §  5909.) 

Policy  covering  building  and  personal  property,  having  separate  amounts 

on  each  must  be  treated  as  separate  policies.     First  Nat.  Rank  v.  German 

American  Ins.  Co.,  23  N.  D.  139,  38  L.  R.  A.   (N.  S.)   213,  134    N.  W.  873. 
Mortgage  as  terminating   insurable    Interest    in    property.      38   L.   R.   A. 

562. 

§  6477.  Change  of  Interest  by  Death.]  A  change  of  interest  by  will 
or  succession  on  the  death  of  the  insured  does  not  avoid  an  insurance,  and  his 
interest  in  the  insurance  passes  to  the  person  taking  his  interest  in  the  thing 
insured.      (R.  C.  1905,  $  5910.) 

§  6478.  Change  Among  Joint  Owners.]  A  transfer  of  interest  by  one 
id'  several  partners,  joint  owners  or  owners  in  common  who  are  jointly  insured 
to  the  others  does  not  avoid  an  insurance,  even  though  it  has  been  agreed  that 
the  insurance  shall  cease  upon  an  alienation  of  the  thing  insured.  (R.  < '.  1905, 
$  5911.) 

Whether  sale  by  one  partner  to  another,  whether  amounts  to  change  of 

title.     49  Am.  Rep.  22;  52  Am.  Rep.    142. 


66  INSURANCE  LAWS 

§  6479.  Stipulation  ok  Interest  Von).]  Every  stipulation  in  a  policy 
of  insurance  for  the  payment  of  loss  whether  the  person  insured  lias  or  has 
not  any  interest  in  the  property  insured  or  that  the  policy  shall  be  received  as 

proof  of  such  interest  and  every  policy  executed  by  way  of  gaming  or  wagering 
is  void.      (R.  C.  1905,  §  5912.) 

Article  5 — Concealment  and  Representation. 

§  6480.  CONCEALMENT  Defined.]  A  neglect  to  communicate  that  which 
a  party  knows  and  ought  to  communicate  is  called  a  concealment.  (R.  C.  1905, 
$  5913.) 

Concealment  of  facts  by  insured  in  case  of  Lloyds  Policies.     55  L.  R. 

A.  201. 

Duty    to   notify    insurer    of    facts    which    develop    after    submission    of 

application,  but  before  delivery  of  policy  or  certificate.     39  L.  R.  A.    (N. 

S.)   951. 

§  6481.  Rescission  on  Account  op.]  A  concealment,  whether  intentional 
or  unintentional,  entitles  the  injured  party  to  rescind  a  contract  of  insurance. 
(R.  C.   1905,   $   5914.) 

When  concealment  or  misrepresentation  avoid  insurance.     35  Am.   Rep. 

629. 

§  6482.  Mutual  Disclosures.]  Each  party  to  a  contract  of  insurance 
must  communicate  to  the  other  in  good  faith  all  facts  within  his  knowledge 
which  are  or  which  he  believes  to  be  material  to  the  contract  and  which  the 
other  has  not  the  means  of  ascertaining  and  as  to  which  he  makes  no  warranty. 
(R.  0.  1905,  §  5915.) 

§  6483.  What  Not  Bound  to  Disclose.]  Neither  party  to  a  contract  of 
insurance  is  bound  to  communicate  information  of  the  matters  following,  except 
in  answer  to  the  inquiries  of  the  other: 

1.  Those  which  the  other  knows. 

2.  Those  which  in  the  exercise  of  ordinary  care  the  other  ought  to  know 
and  of  which  the  former  has  no  reason  to  suppose  him  ignorant. 

3.  Those  of  winch  the  other  waives  communication. 

4.  Those  which  prove  or  tend  to  prove  the  existence  of  a  risk  excluded 
by  a  warranty  and  which  are  not  otherwise  material ;  and, 

5.  Those  which  relate  to  a  risk  excepted  from  the  policy  and  which  are  not 
otherwise  material.     (R,  C.  1905,  §  5916.) 

§  6484.  How  Materiality  Determined.]  Materiality  is  to  be  determined 
not  by  the  event,  but  solely  by  the  probable  and  reasonable  influence  of  the 
facts  upon  the  party  to  whom  the  communication  is  due  in  forming  his  estimate 
of  the  disadvantages  of  the  proposed  contract  or  in  making  his  inquiries. 
(R.  C.  1905,  §  5917.) 

.Materiality    of    representation.      Waterburv    v.    Ins.    Co.,    6    D.    468,    43 

N.   W.   697. 

§  6485.  Presumption  op  Knowledge.]  Each  party  to  a  contract  of  insur- 
ance is  bound  to  know  all  the  general  causes  which  are  open  to  his  inquiry, 
equally  with  that  of  the  Other  and  which  may  affect  either  the  political  or 
material  perils  contemplated,  ami  all  general  usages  of  trade.  (R.  C.  1905. 
$  5918.) 

$   6486.      RIGHT   to    Information    WATTED.]      The    right   to    information    of 


STATE  OF  NOETH  DAKOTA  67 

material  facts  may  be  waived,  either  by  the  terms  of  insurance,  or  by  neglect 
to  make  inquiries  as  to  such  facts,  when  they  are  distinctly  implied  in  other 
facts  of  which  information  is  communicated.     (R.  C.  1905,  §  5919.) 

Life  insurance  agents  accepting  insurance  when  they  know  answers  in 

the  application  are  false.     7   Am.  Rep.  128. 

§  6487.     Information  as   to   Interest.]      Information   of   the   nature  or 
amount  of  the  interest  of  the  one  insured  need  not  be  communicated  unless  in 
answer  to  inquiry,  except  as  prescribed  by  section  5937.     (R.  C.  1905,  §  5920.) 
Clause  avoiding   policy   in   case  property   is   incumbered    not   waived    by 

insurer's  neglect   to  make  inquiry  if  such   incumbrance   is  a   chattel  mort- 
gage.    Harding  v.  Ins.  Co.,  10  S.  D.  64,  71  N.  W.  755. 

How  far  an  undivided  interest  in  property  is  a  complete  or  full  owner- 
ship for  the  purpose  of  insurance.     18  L.  R.  A.  481. 

Vendee   under   executory   contract   is   owner,   where   vendee   holds   legal 

title.     20  L.  R.  A.   (N.  S.)   775. 

Retention  of  policy  as  waiver  of  mistake  or  fraud  as  to  state  of  title. 

67  L.  R.  A.  731. 

Effect  of  broker's  knowledge  as  to  title.     38  L.  R,  A.   (N.  S.)  637. 
Conclusiveness   of   statements   as   to   ownership,    etc.,    in    proof   of   loss. 

44  L.  R.  A.  859. 

§  6488.  Rescission  for  Fraudulent  Concealment.]  An  intentional  and 
fraudulent  omission  on  the  part  of  one  insured  to  communicate  information  of 
matters  proving  or  tending  to  prove  the  falsity  of  a  warranty  entitles  the 
insurer  to  rescind.     (R.  C.  1905,  §  5921.) 

§  6489.  Matters  of  Opinion.]  Neither  party  to  a  contract  of  insurance 
is  bound  to  communicate  even  upon  inquiry  information  of  his  own  judgment 
upon  the  matters  in-  question.     (R.  C.  1905,  §  5922.) 

§  6490.  Form  of  Representation.]  A  representation  may  be  oral  or 
written.      (R.  C.  1905,  §  5923. 

§  6491.  When  May  be  Made.]  A  representation  may  be  made  at  the 
same  time  with  issuing  the  policy  or  before  it.     (R.  C.  1905,  §  5924.) 

§  6492.  Rules  of  Interpretation.]  The  language  of  a  representation  is 
to  be  interpreted  by  the  same  rules  as  the  language  of  contracts  in  general. 
(R.  C.  1905,  $  5925.) 

Failure  to  build  a  chimney  as  promised  will  not  avoid  policy.     Water- 
bury  v.  Ins.  Co.,  6  D.  468,'  43  N.  W.  697. 

Warranties  and  representations  and  their  effect.     16  Am.  Dec.  462;   59 

Am.  Rep.  816. 

§  6493.  What  Deemed  Promise.]  A  representation  as  to  the  future  is  to 
be  deemed  a  promise,  unless  it  appears  that  it  was  merely  a  statement  of  belief 
or  expectation.     (R,  C.  1905,  §  5926.) 

§  6491.  Cannot  Qualify  Contract;  May,  Implied  Warranty.]  A  repre- 
sentation cannot  be  allowed  to  qualify  an  express  provision  in  a  contract  of 
insurance;  but  it  may  qualify  an  implied  warranty.      (R.  C.  1905,  §  5927.) 

§  6495.  When  May  be  Withdrawn.]  A  representation  may  be  altered 
or  withdrawn  before  the  insurance  is  effected,  but  not  afterwards.  (R.  C. 
1905,  §  5928.) 

§   6496.     Time  to  WHICH  Refers.]     The  completion  of  the  contract  of  in- 


(38  INSURANCE  LAWS 

surance  is  the  time  to   which   a    representation   must  be  presumed   to   refer. 
(K.  ('.  .1905,  §  5929.) 

§  G497.  On  Information  and  Belief.]  When  a  person  insured  has  no 
personal  knowledge  of  a  fact,  he  may,  nevertheless,  repeat  information  which 
he  lias  upon  the  subject  and  which  he  believes  to  be  true  with  the  explanation 
that  he  does  so  on  the  information  of  others,  or  he  may  submit  the  information 
in  its  whole  extent  to  the  insurer;  and  in  neither  case  is  he  responsible  for 
its  truth,  unless  it  proceeds  from  an  agent  of  the  insured  whose  duty  it  is  to 
give  the  intelligence.     (R.  C.  1905,  §  5930.) 

§  6498.  When  Deemed  False.]  A  representation  is  to  be  deemed  false 
when  the  facts  fail  to  correspond  with  its  assertions  or  stipulations.  (R.  C. 
1905,  §  5931.) 

§  6499.  Effect  of  Falsity.]  If  a  representation  is  false  in  a  material 
point,  whether  affirmative  or  promissory,  the  injured  party  is  entitled  to  rescind 
the  contract  from  the  time  when  the  representation  becomes  false.  (R.  C. 
1905,  §  5932.) 

Life  insurance  agents  accepting  insurance  when  they  know  answers  in 

the  application  are  false.     7  Am.  Rep.  128. 

Right  of  insured  to  return  of  premium  where  policy  is  void  or  voidable 

because  of  misrepresentations  on  his  part.     32  L.  R.  A.  (N.  S.)  298. 

§  6500.  How  Materiality  Determined.]  The  materiality  of  a  repre- 
sentation is  determined  by  the  same  rule  as  the  materiality  of  a  concealment. 
(R.  C.  1905,  §  5933.) 

§  6501.  When  Not  Material.]  No  oral  or  written  misrepresentation 
made  in  the  negotiation  of  a  contract  or  policy  of  insurance  by  the  insured  or 
in  his  behalf  shall  be  deemed  material  or  defeat  or  avoid  the  policy  or  prevent 
its  attaching,  unless  such  misrepresentation  is  made  with  •actual  intent  to  de- 
ceive, or  unless  the  matter  misrepresented  increased  the  risk  of  loss.  (R.  C. 
1905,  §  5934.) 

Misrepresentation  referred  to  in  statute  includes  statements  in  applica- 
tions  for    insurance,    called    warranties,    by    law    of    insurance.      Soules    v. 

Brotherhood  of  American  Yoemen,  19  N.  D.  23,  120  N.  W.  760. 

§  6502.  Modification.  Rescission.]  The  provisions  of  this  article  apply 
as  well  to  a  modification  of  a  contract  of  insurance  as  to  its  original  formation. 
Whenever  a  right  to  rescind  a  contract  of  insurance  is  given  to  the  insured  by 
any  provision  of  this  chapter  such  right  may  be  exercised  at  any  time  previous 
to  the  commencement  of  an  action  on  the  contract.     (R.  C.  1905.  §  5935.) 

Article  6 — The  Policy. 

§  6503.  Defined.]  The  written  instrument  in  which  a  contract  of  insur- 
ance is  set  forth  is  called  a  policy  of  insurance.      (R.  ('.  1905,  §  5936.) 

§   6504.     What  Must  Specify.]      A  poliev  of  insurance  must  specify: 

1.  The  parties  between  whom  the  contract  is  made. 

2.  The  rate  of  premium. 

3.  The  property  or  life  insured. 

4.  The  interest  of  the  insured  in  property  insured,  if  he  is  not  the  absolute 
owner  thereof. 

5.  The  risks   insured    against;   and. 


STATE  OF  NORTH  DAKOTA  69 

6.  The  period  during  which  the  insurance  is  to  continue.  (R.  C.  1905, 
$  5937.) 

As  to  similar  provision  in  Cal.  Civ.  Code,  4  2557,  see  Davis  v.  I'hcenix 
Ins.  Co.,  Ill  Cal.  409,  43  Pac.  1115. 

4.  Effect  of  bond  for  title  to  defeat  unconditional  and  sole  ownership. 
2  L.  R.  A.  (N.  S.)  512. 

Vendors  lien  as  affecting  sole  and  unconditional  ownership.  7  L.  R.  A. 
(N.  S.)  627. 

Failure  to  record  conveyance  to  insured  as  affecting  his  "sole  and  un- 
conditional ownership."     22  L.  R.  A.   (N.  S.)   732. 

Title  for  purpose  of  insurance,  of  house  on  government  land  under 
homestead  entry,  as  within  sole  and  unconditional  ownership  clause  in 
insurance  policy.     8  L.  R.  A.  (N.  S.)  903. 

Want  of  title  to  land  where  insured  is  sole  and  absolute  owner  of  build- 
ing.    38  L.  R,  A.  (N.  S.)  427. 

§  6505.  Applied  Only  to  Interest.]  When  the  name  of  the  person  in- 
tended to  be  insured  is  specified  in  a  policy,  it  can  be  applied  only  to  his  own 
proper  interest.     (R,  C.  1905,  §  5938.) 

§  6506.  Insurance  by  Trustee  or  Agent.]  When  an  insurance  is  made 
by  an  agent  or  trustee,  the  fact  that  his  principal  or  beneficiary  is  the  person 
really  insured  may  be  indicated  by  describing  him  as  an  agent  or  trustee  or 
by  other  general  words  in  the  policy.     (R.  C.  1905,  §  5939.) 

§  6507.  Terms  Govern  Joint  or  Common  Interest.]  To  render  an  insur- 
ance effected  by  one  partner  or  part  owner,  applicable  to  the  interest  of  his 
co-partners  or  of  other  part  owners,  it  is  necessary  that  the  terms  of  the  policy 
should  be  such  as  are  applicable  to  the  joint  or  common  interest.  (R.  C.  1905, 
§  5940.) 

§  6508.  Only  Person  Tntp;nded  May  Claim  Benefit.]  When  the  de- 
scription of  the  insured  in  a  policy  is  so  general  that  it  may  comprehend  any 
person  or  any  class  of  persons,  he  only  can  claim  the  benefit  of  the  policy  who 
can  show  that  it  was  intended  to  include  him.     (R.  C.  1905,  §  5941.) 

Insuring  under  an  assumed  name.  Pollard  v.  Ins.  Co.,  1  S.  D.  570, 
47  N.  W.  1060. 

Condition  rendering  policy  void  on  procuring  additional  insurance  with- 
out consent  of  company  cannot  be  waived  by  agent  whose  agency  has  ex- 
pired.   Smith  v.  Ins.  Co.,  6  D.  433,  43  N.  W.  810. 

Representations  in  application  signed  by  agent  disregarded.  South 
Bend  Toy  Co.  v.  Ins.  Co.,  2  S.  D.  17,  48  N.  W.  310. 

Knowledge  of  facts  by  agent  may  be  a  waiver.  Lyon  v.  Ins.  Co.,  6 
D    67,  50  N.  W.  483. 

Devesture  of  title  by  sheriff's  deed  being  proved  it  is  error  to  allow 
plaintiff  to  show  deed  to  lie  void.  Tierney  v.  Ins.  Co.,  4  N.  D.  565,  62  N. 
W.  642. 

Failure  of  mortgagee  to  notify  company  of  changes  in  condition  of 
property.     Ormsby  v.  Tns.  Co.,  5  S.  D.  72,  58  N.  W.  301. 

False  statement  in  application  and  medical  examination  for  life  insur- 
ance constitute  breach  of  warranty.  Knudson  v.  Legion  of  Honor.  7 
S.  D.  214,  63  N.  W.  911. 


7()  INSURANCE  LAWS 

§  6509.  BENEFIT  OF  Any  Owner.]  A  policy  may  be  so  framed  that  it 
will  inure  to  the  benefit  of  whomsoever  dining  the  continuance  of  the  risk  may 
become  the  owner  of  the  interest  insured.     (R.  C.  1905,  §  5942.) 

§  6510.  Transfer  Suspends.]  The  mere  transfer  of  a  thing  insured  does 
not  transfer  the  policy,  but  suspends  it  until  the  same  person  becomes  owner 
of  both  the  policy  and  the  thing  insured.     (R.  C.  1905,  §  5943.) 

§  6511.  Classified.]  A  policy  is  either  open  or  valued.  (R.  C.  1905, 
§  5944.) 

§  6512.  Open.]  An  open  policy  is  one  in  which  the  value  of  the  thing 
insured  is  not  agreed  upon,  but  is  left  to  be  ascertained  in  case  of  loss.  (R.  C. 
1905,  §  5945.) 

§  6513.  Valued.]  A  valued  policy  is  one  which  expresses  on  its  face 
an  agreement  that  the  thing  insured  shall  be  valued  at  a  specified  sum.  (R.  C. 
1905,  §  5946.) 

Under  standard  policy,  value  of  real  property  on  total  loss  is  conclu- 
sively fixed  by  total  of  all  insurance  written  therein  which  is  amount  of 
policy  and  concurrent  insurance.  Lawyer  v.  Globe  Mut.  Ins.  Co.,  25  S.  D. 
549,  127  N.  W.  615. 

§  6514.  Running.]  A  running  policy  is  one  which  contemplates  succes- 
sive insurances  and  which  provides  that  the  object  of  the  policy  may  be  from 
time  to  time  defined,  especially  as  to  the  subjects  of  insurance,  by  additional 
statements  or  indorsements.     (R.  C.  1905,  §  5947.) 

§  6515.     Receipts  for  Premium.     Effect  of.]     An  acknowledgment  in  a 
policy  of  the  receipt  of  premium  is  conclusive  evidence  of  its  payment  so  far  as 
to  make  the  policy  binding,   notwithstanding   any   stipulation   therein   that   it 
shall  not  be  binding  until  the  premium  is  actually  paid.     (R.  C.  1905,  §  5948.) 
Is    not   unconstitutional   because    it    declares    that    receipt    of   premium 
acknowledged   in   policy   is  conclusive   evidence   of  payment.      Peever   Mer- 
cantile Co.  v.  State  Mut.  F.  Ins.  Co.,  25  S.  D.  406,  127  N.  W.  559. 

Insurance  company  acknowledging  receipt  of  premium  in  renewal  policy 
x     cannot  deny  same  in  action  on  policy.     Peever  Mercantile  Co.  v.  State  Mut. 
F.  Asso.,  23  S.  D.  1,  119  N.  W.  1008. 

Insurance  company  cannot  be  permitted  to  show  that  actual  date  of 
issuance  of  policy  was  of  later  date  than  date  recited  in  policy,  where 
policy  acknowledges  receipt  of  premium.  Harrington  v.  Mutual  L.  Ins.  Co., 
21  N.  D.  447,  34  L.  R.  A.  (N.  S.)  373,  131  N.  W.  246. 

Policy  becomes  binding  on  its  delivery  to  insured,  though  it  contains 
condition  that  policy  shall  not  take  effect  until  actual  payment  of  first 
premium.  Chasse  v.  Bankers'  Reserve  Fund  L.  Ins.  Co.,  27  S.  D.  70, 
129  N.  W.  568. 

Waiver  of  conditions  requiring  payment  of  premium  before  delivery  of 
policy.     57  Am.  Rep.  514. 

As  to  similar  provision  in  Cal.  Civ.  Code,  section  2598,  see  Palmer  v. 
Continental  Ins.  Co.,  132  Cal.  68,  64  Pac.  97. 

§  6516.  Agreement  Not  to  Transfer  Void.]  An  agreement  made  before 
a  loss  not  to  transfer  the  claim  of  a  person  insured  against  the  insurer  after 
the  loss  lias  happened  is  void.     (R,  C.  1905,  §  5949.) 

§  6517.     Holder  May  Surrender  for  Cancellation.]     The  holder  of  any 


STATE  OF  NORTH  DAKOTA  71 

policy  of  insurance  against  loss  or  damage  to  property  by  fire  or  other  casualty 
hereafter  issued  by  any  insurance  company  doing  or  contract  to  the  contrary, 
at  any  time  surrender  the  same  for  cancellation;  and  upon  such  surrender  the 
company  issuing  such  policy  shall  retain  or  receive  such  proportion  and  not 
more  of  the  premium  paid  or  agreed  to  be  paid  as  corresponds  with  the  usual 
short  rates  upon  term  policies  as  adopted  and  maintained  by  the  Minnesota 
and  Dakota  fire  underwriters'  union  of  St.  Paul,  Minnesota,  for  the  time  the 
policy  remained  in  force.     (R.  C.  1905,  §  5950.) 

§  6518.  Notice  Necessary  to  Forfeit.]  No  such  policy  of  insurance 
shall  by  virtue  of  any  condition  or  provision  thereof  be  forfeited,  suspended 
or  impaired  for  non-payment  of  any  note  or  obligation  taken  for  the  premium, 
or  any  part  thereof,  unless  the  insurer  shall,  not  less  than  thirty  days  prior  to 
the  maturity  of  such  premium,  note  or  obligation,  mail,  postage  prepaid,  to  the 
assured  at  his  usual  postoffice  a  notice  stating: 

1.  The  date  when  such  note  or  obligation  will  become  due. 

2.  The  amount  of  principal  and  interest  that  will  then  be  due. 

3.  The  effect  upon  the  policy  of  non-payment. 

4.  Such  notice  shall  further  inform  the  assured  of  his  right  at  his  own 
election  either  to  pay  in  full  and  keep  the  policy  in  full  force,  or  to  terminate 
the  insurance  by  surrendering  the  policy  and  paying  such  part  of  the  whole 
premium  as  it  shall  have  earned  and  must  further  state  the  amount  which  the 
assured  is  lawfully  required  to  pay,  or  which  on  account  of  previous  payment 
may  be  due  him  in  case  of  his  election  to  terminate  the  insurance  on  the  day 
of  the  maturity  of  'the  premium,  note  or  obligation.     (R.  C.  1905,  §  5951.) 

Notice  to  insured  that  premium  note  falls  due  on  certain  date  not  suf- 
ficient to  forfeit  policy  for  non-payment  of  premium.  Epiphany  Catholic 
Church  v.  Ins.  Co.,  16  S.  D.  17,  91  N.  W.  332. 

Notice  mailed  twenty-three  days  before  premium  note  falls  due  is 
insufficient.  Epiphany  R.  C.  Church  v.  German  Ins.  Co.,  16  S.  D.  17,  91 
N.  W.  332. 

First  and  last  days  in  computing  time  for  notice  of  premiums.  49 
L.  R.  A.  208. 

Mode  of  proving  mailing  of  notice  of  maturity  of  premiums  or  assess- 
ments.    7  L.  R.  A.   (N.  S.)  238. 

Necessity  that  notice  of  maturity  of-  premiums  or  assessments  sent 
through  the  mail  be  received.     7  L.  R.  A.  (N.  S.)  253. 

Effect  of  custom  to  give  insured  notice  of  maturity  of  premium  where 
insured  is  not  otherwise  entitled  to  notice.     20  L.  R.  A.   (N.  S.)   1037. 

Article  7 — "Warranties. 
5  6519.     Classified.]      A   warranty   is   either  express   or   implied.      (R.   C. 
1905,  $  5952.) 

Policy  of  insurance  cannot  be  avoided  after  loss  where  premium  was 
received  with  full  knowdedge  of  facts.  Leisen  v.  St.  Paul  F.  &  M.  Ins.  Co., 
20  N.  D.  316,  30  L.  R,  A.  (N.  S.)  539,  127  N.  W.  837. 

Warranties  and  representations  and  their  effect.     16  Am.  Rep.  816. 
§   6520.     No  Form  Necessary.]     No  particular  form  of  words  is  necessary 
to  create  a  warranty.     (R.  C.  1905,  §  5953.) 

Warranties  in  case  of  Lloyds  policies.     55  L.  R.  A.  202. 


72  INSURANCE  LAWS 

When  may  statements  be  regarded  as  representations,  although  expressly 

denominated  in  the  policy  as  warranties.     11  L.  R.  A.   (N.  S.)  981. 

When  answers  concerning  watchmen  deemed  to  be  warranties.     33  Am. 

Rep.  832. 

§  0521 .  Express,  Must  be  Written.]  Every  express  warranty  made  at 
or  before  the  execution  of  a  policy  must  be  contained  in  the  policy  itself,  or 
in  another  instrument  signed  by  the  insured  and  referred  to  in  the  policy  as 
making  a  part  of  it.     (R.  C.  1905,  §  5954.) 

§  6522.  To  What  Time  May  Relate.]  A  warranty  may  relate  to  the 
past,  the  present,  the  future  or  to  any  or  all  of  these.     (R.  C.  1905,  §  5955.) 

§  6523.  What  Statement  of  Fact  is  Express  Warranty.]  A  statement 
in  a  policy  of  a  matter  relating  to  the  person  or  thing  insured  or  to  the  risk 
as  a  fact  is  an  express  warranty  thereof.     (R.  C.  1905,  §  5956.) 

Policy   of  insurance  cannot  be   avoided  after  loss  where   premium   was 

received  with  full  knowledge  of  facts.     Leisen  v.  St.  Paul  F.  &  M.  Ins.  Co., 

20  N.  D.  316,  30  L.  R.  A.  (N.  S.)  539,  127  N.  W.  837. 

On  representations  and  promises  made  in  application  for  policy  as  im- 
material  because   policy    does   comply   with   this   section.      Farmers'    &   M. 

State  Bank  v.  United  States  Fidelity  &  G.  Co.,  28  S.  D.  315,  36  L.  R,  A. 

(N.  S.)  1152,  133  N.  W.  247. 

As  to   similar  provision  in  Cal.   Civ.   Code,   section   2607,   see   National 

Bank  v.  Union  Ins.  Co.,  88  Cal.  497,  Am.  St.  Rep.  324;  26  Pac.  509. 

§  6524.  Statement  op  Intention  a  Warranty.]  A  statement  in  a  policy, 
which  imports  that  it  is  intended  to  do  or  not  to  do  a  thing  which  materially 
affects  the  risk,  is  a  warranty  that  such  act  or  omission  shall  take  place.  (R. 
C.  1905,  §  5957.) 

§  6525.  As  to  Future,  When  Need  Not  be  Fulfilled.]  When  before 
the  time  arrives  for  the  performance  of  a  warranty  relating  to  the  future  a 
loss  insured  against  happens  or  performance  becomes  unlawful  at  the  place  of 
the  contract  or  impossible,  the  omission  to  fulfill  the  warranty  does  not  avoid 
the  policy.     (R.  C.  1905,  §  5958.) 

§  6526.  Rescission  for  Violation  of  Material.]  The  violation  of  a  ma- 
terial warranty  or  other  material  provision  of  a  policy  on  the  part  of  either 
party  thereto  entitles  the  other  to  rescind.     (R.  C.  1905,  §  5959.) 

§  6527.  What  Avoids  Policy.]  A  policy  may  declare  that  a  violation 
of  specified  provisions  thereof  shall  avoid  it;  otherwise  the  breach  of  an  imma- 
terial provision  does  not  avoid  the  policy.     (R.  C.  1905,  §  5960.) 

Forfeiture  waived  by  demanding  judgment  for  premium  note.     Johnson 

v.  Ins.  Co.,  1  N.  D.  167,  45  N.  W.  799. 

Undisclosed  incumbrances  will  avoid  policy.     Peet  v.  Ins.  Co.,  7  S.  D. 

410,  64  N.  W.  206. 

Policy  of  insurance  cannot  be  avoided   after  loss  where  premium   was 

received  with  full  knowledge  of  facts.     Leisen  v.  St.  Paul  F.  &  M.  Ins.  Co., 

20  N.  D.  316,  30  L.  R.  A.  (N.  S.)  539,  127  N.  W.  837. 

5  6528.  Breach  Without  Fraud.]  A  breach  of  warranty  without  fraud 
merely  exonerates  an  insurer  from  the  time  that  it  occurs,  or  when  it  is  broken 
in  its  inception,  prevents  the  policy  from  attaching  to  the  risk.  (R.  C.  1905, 
$  5961.) 


STATE  OF  NORTH  DAKOTA  73 

Policy  of  insurance  cannot  be  avoided  after  loss  where  premium  was 
received  with  full  knowledge  of  the  facts.  Leisen  v.  St.  Paul  F.  &  M.  Ins. 
Co.,  20  N.  D.  316,  30  L.  R.  A.  (N.  S.)  539,  127  N.  W.  837. 

Article  8 — Premium. 
§  6529.     When  Premium  Payable.]    An  insurer  is  entitled  to  the  payment 
of  the  premium   as  soon  as  the  thing   insured   is  exposed  to  the  peril  insured 
against.     (R.  C.  1905,  §  5962.) 

What  amounts  to  waiver  of  payment  of  premium.     29  Am.  Rep.  777. 
As  to  similar  provision  in  Gal.  Civ.  Code.     Section  2616,  Joshua  Bendy 
Mach.  Works  v.  American  Steam  Boiler  Ins.  Co.,  86  Cal.  248,  21  Am.   St. 
Rep.  33,  24  Pac.  1018. 

§  6530.  When  Insured  Entitled  to  Return.]  A  person  insured  is  en- 
titled to  return  of  premium  as  follows: 

1.  To  the  whole  of  the  premium  if  no  part  of  his  interest  in  the  thing 
insured  is  exposed  to  any  of  the  perils  insured  against. 

2.  When  the  insurance  is  made  for  a  definite  period  of  time  and  the  in- 
sured surrenders  his  policy,  to  such  proportion  of  the  premium  as  corresponds 
with  the  unexpired  time  after  deducting  from  the  whole  premium  any  claim 
for  loss  or  damage  under  the  policy  which  has  previously  accrued.  (R.  C. 
1905,  §  5963.) 

Premium  note  past  due  is  collectible  though  policy  is  void  while  due 
and  unpaid.  St.  Paul  Ins.  Co.  v.  Coleman,  6  D.  458,  43  N.  W.  693;  St. 
Paul  Ins.  Co.  v.  Neidecken,  6  D.  494,  43  N.  W.  696;  Johnson  v.  Ins.  Co., 
1  N.  D.  167,  56  N.  W.  709. 

Breach  of  agreement  of  insurer  to  make  loan  on  policy  as  justifying 
rescission  and  recovery  of  premiums  by  insured.  30  L.  R.  A.  (N.  S.) 
1202. 

Right  of  insured  to  return  of  premium  where  insurer  seeks  rescission  on 
ground  of  misrepresentation  by  insured.     32  L.  R.  A.   (N.  S.)   299. 

As  to  similar  provision  in  Cal.  Civ.  Code,  section  2617,  see  Joshua  Bendy 
Mach.  Works  v.  American  Steam  Boiler  Ins.  Co.,  86  Cal.  248,  21  Am.  St. 
Rep.  33,  24  Pae.  1018. 

§  6531.  Premium  DEFINED.]  The  term  premium  within  the  meaning  of 
sections  6517,  6518  and  6530  includes  policy  fees  in  excess  of  two  dollars  on 
any  one  policy  and  all  other  sums  of  money  paid  or  agreed  to  be  paid  in  con- 
sideration of  the  policy  of  insurance.     (R.  C.  1905,  §  5964.) 

§  6532.  RETURN  When  INSURANCE  is  Voidable.]  A  person  insured  is 
entitled  to  a  return  of  the  premium  when  the  contract  is  voidable  on  account 
of  the  fraud  or  misrepresentation  of  the  insurer  or  on  account  of  facts  of 
the  existence  of  which  the  insured  was  ignorant  without  his  fault;  or  when  by 
any  default  of  the  insured  other  than  actual  fraud,  the  insurer  never  incurred 
any  liability  under  the  policy.     TR.  C.  1905,  §  5965.) 

Return  of  assessment  on  benefit  certificate  proving  void  for  fraud.  3 
L.  R.  A.  (N.  S.)   114. 

Reason  of  insured  to  return  of  premium  where  policy  is  void  or  voidable 
because  of  misrepresentations  on  his  part.     32  L.  R.  A.   (N.  S.)   298. 
§  6533.     Not  Entitled  to  Return.]     If  a  peril  insured  against  has  existed 
and  the  insurer  has  been   liable  for  any   period,  however  short,   the   insured   is 


74  INSURANCE  LAWS 

not  entitled  to  a  return  of  premium  so  far  as  that  particular  risk  is  concerned, 
unless  the  insurance  was  for  a  definite  period  of  time,  in  which  case  he  is 
entitled  to  a  proportionate  return  under  sections  6517  and  6530.  (R.  G.  1905, 
§   5966.) 

§  6534.  Return  ix  Over  Insurance  bv  Several.]  In  case  of  an  over 
insurance  by  several  insurers  the  insured  is  entitled  to  a  ratable  return  of  the 
premium,  proportioned  to  the  amount  by  which  the  aggregate  sum  insured 
in  all  the  policies  exceeds  the  insurable  value  of  the  thing  at  risk.  (R.  C.  1905, 
«  5967.) 

§  6535.  Contribution  to  Return.]  When  an  over  insurance  is  effected 
by  simultaneous  policies  the  insurers  contribute  to  the  premium  to  be  returned 
in  proportion  to  the  amount  insured  by  their  respective  policies.  (R.  C.  1905, 
§  5968.) 

§  6536.  Same.]  When  an  over  insurance  is  effected  by  successive  policies, 
those  only  contribute  to  a  return  of  the  premium  who  are  exonerated  by  prior 
insurances  from  the  liability  assumed  by  them  and  in  proportion  as  the  sum 
for  which  the  premium  was  paid  exceeds  the  amount  for  which  on  account  of 
prior  insurance  thev  could  be  made  liable.     (R.  C.  1905,  §  5969.) 

Article  9 — Loss. 

§  6537.  When  Insurer  Liable.]  An  insurer  is  liable  for  a  loss  of  which 
a  peril  insured  against  was  the  proximate  cause,  although  a  peril  not  contem- 
plated by  the  contract  may  have  been  a  remote  cause  of  the  loss;  but  he  is 
not  liable  for  a  loss  of  which  the  peril  insured  against  was  only  a  remote  cause. 
(R.  C.  1905    §  5970.) 

Losses  for  which  insurer  is  liable.     36  Am.  St.  Rep.  852. 
What  included  in  fire,  loss  by.     45  Am.  Dec.  657;  23  Am.  St.  Rep.  915; 
133  Am.  St.  Rep.  1087. 

What  is  proximate  cause  of  loss.     36  Am.  St.  Rep.  852. 
Custom  to  pay  certain  class  of  losses  as  affecting  liability  of  insurer  for 
such  a  loss  not  covered  by  the  policy.     19  L.  R.  A.   (N.  S.)  421. 

Retention  of  policy  as  waiver  of  mistake  or  fraud  of  insurer  or  agent 
as  to  provisions  as  to  risks  insured  against.     67  L.  R.  A.  711. 

Loss  by  lightning.  26  L.  R,  A.  267. 
$  6538.  Liable  for  Loss  in  Rescuing.]  An  insurer  is  liable  when  the 
thing  insured  is  rescued  from  a  peril  insured  against  that  would  otherwise 
have  caused  a  loss,  if  in  the  course  of  such  rescue  the  thing  exposed  to  peril, 
not  insured  against,  which  permanently  deprives  the  insured  of  its  possession 
in  whole  or  in  part;  or  when  a  loss  is  caused  by  efforts  to  rescue  the  thing 
insured  from  a  peril  insured  against.      (R.  C.  1905,  §  5971.) 

§  6539.  Not  Liable  for  Peril  Excepted.]  When  a  peril  is  specially 
excepted  in  a  contract  of  insurance,  a  loss  which  would  not  have  occurred  but 
for  such  peril  is  thereby  excepted,  although  the  immediate  cause  of  the  loss 
was  a  i  eril  which  was  not  excepted.      (R.  C.  1905,  §  5972.) 

Does  general  requirement  as  to  external,  violent  ami  accidental  means 
apply  to  a  separate  provision  as  to  liability  in  case  of  death  or  injury  from 
certain  specified  causes,     l'7  L.  R.  A.  (N.  S.)  480. 

When  death  or  injury  may  be  deemed  to  have  been  caused   by  accidental 


STATE   OF  NORTH  DAKOTA  7.". 

means,  though  the  voluntary  act  of  insured  was  the  primary  cause  thereof. 
5  L.  R.  A.   (N.  S.)   657. 

§  65-10.  Willful  Act  Exonerates;  Negligence  Not.]  An  insurer  is  not 
liable  for  a  loss  caused  by  the  willful  act  of  the  insured;  but  he  is  not  exoner- 
ated by  the  negligence  of  the  insured  or  of  his  agents  or  others.  (R.  C.  1905, 
§  5973.) 

Negligence  of  assured  will  not  avoid  policy.  Angier  v.  Ins.  Co.,  10 
S.  D.  82,  71  N.  W.  761,  65  Am.  St.  Rep.  685. 

Policy  holder  cannot  recover  for  loss  of  personal  property  where  he  did 
not  exercise  proper  diligence  to  save  same.  First  National  Bank  v.  German 
American  Ins.  Co.,  23  N.  D.  139,  L.  R.  A.  (N.  S.)  213,  134  N.  W.  873. 

Liability  of  insurance  company  in  case  of  intentional  destruction  of 
property  by  insured.     17  L.  R,  A.  (N.  S.)   189. 

Article  10 — Notice  of  Loss. 
§  6541.     Without  Unnecessary  Delay.]     In  case  of  loss  upon  an  insur- 
ance  against 'fire  an   insurer  is  exonerated,   if  notice  thereof  is  not   given  to 
him  by  some  person  insured,  or  entitled  to  the  benefit  of  the  insurance  without 
unnecessary  delay.      (R.  C.  1905,  §  5974.) 

Proof  of  loss  in  case  of  Lloyd 's  policies.     55  L.  R.  A.  200. 
Delay  in  giving  notice  of  claim  under  employer's  indemnity  policy.     47 
L.  R.  A.  (N.  S.)  1214. 

Condition  in  burglary  insurance  policy  as  to  notice  and  proof  of  loss. 
46  L.  R.  A.   (N.  S.)   571. 

Waiver  by  requiring  further  proofs  of  loss.     9  Am.  St.  Rep.  236. 
§  6542.     Only  Best  Proof  in  Power  Required.]     When  preliminary  proof 
of  loss  is  required  by  a  policy  the  insured  is  not  bound  to  give  such  proof  as 
would  be  necessary  in  a  court  of  justice;  but  it  is  sufficient  for  him  to  give  the 
best  evidence  which  he  has  in  his  power  at  the  time.     (R.  C.  1905,  §  5975.) 
Effect  of  false  swearing  in  proofs  of  loss.     32  L.  R,  A.  (N.  S.)  453. 
Conclusiveness  of  proofs  of  loss  as  against  insured  or  beneficiary.     44 
L.  R,  A.  846. 

Furnishing  proofs  of  loss  not  under  oath  as  substantial  compliance  with 
policy  requiring  proofs  under  oath.     28  L.  R.  A.   (N.  S.)  651. 

Duty  of  insured  to  submit  to  examination  and  furnish  information.  52 
L.  R,  A.  424. 

§  6543.  Defects  in.  How  Waived.]  All  defects  in  a  notice  of  loss  or  in 
preliminary  proof  thereof  which  the  insured  might  remedy  and  which  the  in- 
surer omits  to  specify  to  him  without  unnecessary  delay  as  grounds  of  objection 
are  waived.     (R,  C.  1905,  $  5976.) 

Objection  to  proofs  of  loss  come  too  late  after  suit  brought  Fosmark 
v.  Equitable  R.  Asso.,  23  S.  D.  102,  120  N.  W.  777. 

Waiver  of  condition  as  to  arbitration  by  accepting  proof  of  loss.  15 
L.  R.  A.   (N.  S.)    1073. 

§  6544.  Delay  in.  How  Waived.]  Delay  in  the  presentation  to  an  in- 
surer of  notice  or  proof  of  loss  is  waived,  if  caused  by  any  act  of  his.  or  if  he 
omits  to  make  objections  promptly  and  specifically  upon  that  ground.  (K.  C. 
1905,  §  5977.) 

Evidence  examined  and  held  waiver.     Johnson  v.  D.  F.  &  M.  Co.,  1  N.  D. 


76  INSURANCE  LAWS 

J (57,  45  N.  W.  799;  PurceU  v.  St.  P.  F.  &  M.  Co.,  5  N.  D.  100,  64  N.  W. 
943;  Peot  v.  D.  F.  &  M.  Co.,  1  S.  D.  462!,  47  N.  W.  532. 

Failure  to  make  objection  to  proof  until  after  expiration  of  time  pre- 
scribed for  making,  held  waiver  of  time.  Angier  v.  Assurance  Co.,  10  S.  D. 
82,  71  N.  W.  761. 

Making  proof  of  loss  may  be  waived  by  company's  adjuster.  Hitch- 
cock v.  Insurance  Co.,  10  S.  D.  271,  72  N.  W.  898. 

§  6545.  Time  in  Which  to  Make.  Blanks  to  be  Furnished.]  Upon 
notice  of  loss  being  given  to  the  insurer  on  behalf  of  the  insured  or  of  a 
beneficiary  under  a  policy  of  life  insurance  the  insured  shall  within  twenty  days 
alter  receipt  of  such  notice  furnish  to  the  insured  or  beneficiary,  as  the  case 
may  be,  a  blank  form  of  proof  of  loss  and  the  insured  shall  have  sixty  days 
after  such  blank  form  is  furnished  in  which  to  make  such  proof  of  loss;  in 
case  of  life  insurance  the  beneficiary  shall  have  ninety  days  after  receipt  of 
such  blank  form  in  which  to  make  such  proof  of  loss.  If  the  insurer  shall  fail 
to  furnish  such  blank  form  of  proof  of  loss  within  the  time  aforesaid  he  shall 
be  deemed  to  have  waived  such  proof  and  any  agreement  made  to  waive  the 
provisions  of  this  section  is  void.     (R.  C.  1905,  §  5978.) 

§  6546.  Failure  to  Furnish  Certificate  of  Another.]  If  a  policy  re- 
quires by  way  of  preliminary  proof  of  loss  the  certificate  or  testimony  of 
another  person  than  the  insured,  it  is  sufficient  for  the  insured  to  use  reason- 
able diligence  to  procure  it  and  in  case  of  the  refusal  of  such  person  to  give  it, 
then  to  furnish  reasonable  evidence  to  the  insurer  that  such  refusal  was  not 
induced  by  any  just  grounds  of  disbelief  in  the  facts  necessary  to  be  certified. 
(R,  C.  1905,  §  5979.) 

Effect  of  failure  of  mortgagor  to  give  notice  or  proof  of  loss  upon  right 
of  mortgagee  to  recover  under  the  policy.     14  L.  R.  A.  (N.  S.)  459. 

Article  11 — Double  Insurance. 
§   6547.     Defined.]      A   double  insurance   exists  when   the   same  person   is 
insured  by  several  insurers  separately  in  respect  to  the  same  subject  and  in- 
terest.    (R.  C.  1905,  §  5980.) 

Waiver  of  conditions  against  other  insurance.     27  Am.  Rep.  601. 
§  6548.     Contribution  of   Insurers.]     In   case  of   double  insurance   the 
several  insurers  are  liable  to  pay  losses  thereon,  as  follows: 

1.  In  fire  insurance  each  insurer  must  contribute  ratably  towards  the  loss 
without  regard  to  the  dates  of  the  several  policies. 

2.  In  marine  insurance  the  liability  of  the  several  insurers  for  a  total  loss, 
whether  actual  or  constructive,  when  the  policies  are  not  simultaneous  is  in  the 
order  of  the  dates  of  the  several  policies,  no  liability  attaching  to  a  second 
or  other  subsequent  policy,  except  as  to  the  excess  of  the  loss  over  the  amount 
of  all  previous  policies  on  the  same  interest.  If  two  or  more  policies  bear  date 
upon  the  same  day  they  are  deemed  to  be  simultaneous  and  the  liability  of 
insurers  on  simultaneous  policies  is  to  contribute  ratably  with  each  other.  The 
insolvency  of  any  of  the  insurers  does  not  affect  the  proportionate  liability  of 
the  other  insurers.  The  liability  of  all  insurers  on  the  same  marine  interest 
for  a  partial  or  average  loss  is  to  contribute  ratably.     (R.  C.  1905,  §  5981.) 

Insurer  is  entitled  to  such  interpretation  of  clause  making  policy  void 
because  of  increase  of  hazard  occasioned  by   insured   as   will    include  inert- 


STATE  OF  NORTH  DAKOTA  77 

gage  placed  upon  property  by  insured.     Lawyer  v.  Globe  Mut.  Ins.  Co.,  25 
S.  D.  549,  127  N.  W.  615. 

Liability  of  successive  insurers.     28  Am.  Dec.  121. 
Article  12 — Reinsurance. 
§   6549.     Defined.]     A  contract  of  reinsurance  is  one  by  which  an  insurer 
procures  a  third  person  to  insure  him  against  loss  or  liability  by  reason  of  such 
original  insurance.     (R.  C.  1905,  §  5982.) 

Reinsurance  and  the   remedies  of  the  parties  thereunder.     45   Am.   St. 
Rep.  442. 

Liability  of  reinsurer.     8  L.  R.  A.   (N.  S.)  845;  44  L.  R.  (N.  S.)   317. 
§  6550.     Disclosures  Required.]     When  an  insurer  obtains  reinsurance  he 
must  communicate  all  the  representations  of  the  original  insurer  and  also  all 
the    knowledge    and    information    he    possesses,    whether    previously    or    subse- 
quently acquired,  which  is  material  to  the  risk.     (R.  C.  1905,  §  5983.) 

§  6551.  Contract  of  Indemnity.]  A  reinsurance  is  presumed  to  be  a 
contract  of  indemnity  against  liability  and  not  merely  against  damage.  (R.  C. 
L905,  $  5984.) 

§  6552.  Original  Insured  no  Interest.]  The  original  insured  has  no 
interest  in  a  contract  of  reinsurance.     (R.  C.  1905,  §  5985.) 


CHAPTER  78. 


Marine  Insurance. 
ARTICLE    1.  Definition  of  marine  insurance,  §   6553. 

2.  Insurable  interest,  <j§  6554-6560. 

3.  Concealment.     $$  6561-6564. 

4.  Representations,  §§  6565-6566. 

5.  Implied  warranties.  §§  6567-6574. 

6.  The  voyage  and  deviation,  §§  6575-6580. 

7.  Loss,  $$  6581-6591. 

8.  Abandonment,  §§  6592-6608. 

9.  Measure  of  indemnity,  $§  6609-6619. 

Article  1 — Definition  of  Marine  Insurance. 
§  6553.     Definition.]     Marine  insurance  is  an  insurance  against  risks  con- 
nected  with   navigation   to   which   a   ship,   cargo,    freightage,   profits   or   other 
insurable  interest  in  movable  property  may  be  exposed  during  a  certain  voyage 
or  a  fixed  period  of  time.     (R.  C.  1905,  $  5986.) 

Article  2 — Insurable  Interest. 

$  6554.  Owner  Always  Has.]  The  owner  of  a  ship  has  in  all  cases  an 
insurable  interest  in  it,  even  when  it  has  been  chartered  by  one  who  covenants 
to  pay  him  its  value  in  case  of  loss.     (R.  C.  1905,  §  5987.) 

§  6555.  Hypothecation  Reduces  Interest.]  The  insurable  interest  of 
the  owner  of  a  ship  hypothecated  by  bottomry  is  only  the  excess  of  its  value 
over  the  amount  secured   by  bottomry.     (R.  C.  1905,  §  5988.) 

§  6556.  Fbeightagb  Defined  as  to  Insi  RANGE.]  Freightage  in  the  sense 
of  a  policy  of  marine  insurance  signifies  all  the  benefit   derived  by  the  owner, 


78  INSURANCE  LAWS 

cither  from  the  chartering  of  the  ship  or  its  employment  for  the  carriage  of 
his  own  goods  or  those  of  others.     (R.  C.  1905,  §  5989.) 

§  6557.  Expected  Freightage.]  The  owner  of  a  ship  has  an  insurable 
interest  in  expected  freightage  which  lie  would  have  certainly  earned  but  for 
the  intervention  of  a  peril  insured  against.      (R.  C.  1905,  §  5990.) 

§  6558.  Same.]  The  interest  mentioned  in  the  last  section  exists,  in  the 
case  of  a  charter  party,  when  the  ship  has  broken  ground  on  the  chartered 
voyage;  and  if  the  price  is  to  be  paid  for  the  carriage  of  goods,  when  they 
are  actually  on  board  or  there  is  some  contract  for  putting  them  on  board  and 
both  ship  and  goods  are  ready  for  the  specified  voyage.     (R.  C.  1905,  §  5991.) 

§  6559.  When  Profits  Insurable  Interest.]  One  who  has  an  interest 
in  the  thing  fremi  which  profits  are  expected  to  proceed  has  an  insurable  interest 
in  the  profits.     (R.  C.  1905,  §  5992.) 

§  6560.  Charterer  Has.]  The  charterer  of  a  ship  has  an  insurable  in- 
terest in  it  to  the  extent  that  he  is  liable  to  be  damnified  by  its  loss.  (R.  C. 
1905,  §  5993.) 

Article  3 — Concealment. 

§  6561.  Disclosures  More  Extensive.]  In  marine  insurance  each  party 
is  bound  to  communicate  in  addition  to  what  is  required  by  section  6482,  all  the 
information  which  he  possesses  material  to  the  risk,  except  such  as  is  mentioned 
in  section  6483  and  to  state  the  exact  and  whole  truth  in  relation  to  all  matters 
that  he  represents  or  upon  inquiry  assumes  to  disclose.     (R.  C.  1905,  §  5994.) 

$  6562.  Belief  of  Another  Material.]  In  marine  insurance  information 
of  the  belief  or  expectation  of  a  third  person  in  reference  to  a  material  fact  is 
material.      (R.  C.  1905.  §  5995.) 

§  6563.  When  Knowledge  of  Loss  Presumed.]  A  person  insured  by  a 
contract  of  marine  insurance  is  presumed  to  have  had  knowledge  at  the  time 
of  insuring  of  a  prior  loss,  if  the  information  might  possibly  have  reached  him 
in  the  usual  mode  of  transmission  and  at  the  usual  rate  of  communication. 
(R,  C.  1905,  §  5996.) 

§  6564.  What  Does  Not  Vitiate  Entire  Contract.]  A  concealment  in 
marine  insurance  in  respect  to  any  of  the  following  matters  does  not  vitiate 
the  entire  contract,  but  merely  exonerates  the  insurer  from  a  loss  resulting  from 
the  risk  concealed : 

1.  The  national  character  of  the  insured. 

2.  The  liability  of  the  thing  insured  to  capture  and  detention. 

3.  The  liability  to  seizure  from  breach  of  foreign  laws  of  trade. 

4.  The  want  of  necessary  documents;  and, 

5.  The  use  of  false  and  simulated  papers.     (R.  C.  1905,  §  5997.) 

Article  4 — Representations. 
§  6565.     Rescission'  for  False.]     If  a  representation  by  a  person  insured 
by  contract  of  marine  insurance  is  intentionally  false  in  any  respect,  whether 
material    or    immaterial,    the    insurer    may    rescind   the   entire    contract.      (1\.    C. 
L905,  §   5998.) 

§  6566.     Without   Fraud  Does  Not  Avoid.]     The  eventual  falsity  of  a 
representation  as  to  expectation  does  not  in  the  absence  <•!'  fraud  avoid  a  con- 
tract of  insurance.     (R.  C.  1905.  $  5999.) 


STATE  OF  NORTH  DAKOTA  79 

Article  5— Implied/  Warranties. 

§  6567.  SEAWORTHINESS.]  In  every  marine  insurance  upon  a  ship  or 
freight,  or  freightage,  or  upon  anything  which  is  the  subject  of  marine  insur- 
ance a  warranty  is  implied  that  the  ship  is  seaworthy.     (R.  ('.  1905,  §  6000.) 

What  embraced  in  warranty  of  seamanship.     1   Am.  Dec.   165;   33   Am. 

Dec.  33. 

§  6568.  Seaworthy  Defined.]  A  ship  is  seaworthy  when  reasonably  fit 
to  perform  the  services  and  to  encounter  the  ordinary  perils  of  the  voyage  con- 
templated by  the  parties  to  the  policy.     (R.  C.  1905,  §  6001.) 

§  6569.  When  Foregoing  Warranty  Complied  With.]  An  implied  war- 
ranty of  seaworthiness  is  complied  with  if  the  ship  is  seaworthy  at  the  time 
of  the  commencement  of  the  risk,  except  in  the  following  cases: 

1.  When  the  insurance  is  made  for  a  specified  length  of  time,  the  implied 
warranty  is  not  complied  with,  unless  the  ship  is  seaworthy  at  the  commence- 
ment of  every  voyage  she  may  undertake  during  that  time;  and, 

2.  When  the  insurance  is  upon  the  cargo,  which  by  the  terms  of  the  polity, 
or  the  description  of  the  voyage  or  the  established  custom  of  the  trade  is  to  be 
transhipped  at  an  intermediate  port,  the  implied  warranty  is  not  complied  with, 
unless  each  vessel  upon  which  the  cargo  is  shipped  or  transhipped  is  seaworthy 
at  the  commencement  of  its  particular  voyage.     (R.  C.  1905,  §  6002.) 

§  6570.  What  Seaworthiness  Includes.]  A  warranty  of  seaworthiness 
extends  not  only  to  the  structure  of  the  ship  itself,  but  requires  that  it  be  prop- 
erly laden  and  provided  with  a  competent  master,  a  sufficient  number  of  com- 
petent officers  and  seamen  and  the  requisite  appurtenances  and  equipments  such 
as  cables  and  anchors,  food,  fuel  and  lights  and  other  necessary  or  proper 
stores  and  implements  for  the  voyage.      (R.  C.  1905,  §  6003.) 

§  6571.  "As  to  Each" Part  of  the  VOYAGE.]  When  different  portions  of 
the  voyage  contemplated  by  a  policy  differ  in  respect  to  the  things  requisite  to 
make  the  ship  seaworthy  therefor,  a  warranty  of  seaworthiness  is  complied 
with,  if  at  the  commencement  of  each  portion  the  ship  is  seaworthy  with  refer- 
ence to  that  portion.     (R,  C.  1905,  §  6004.) 

$  6572.  Delay  in  Repairing  Exonerates.]  When  a  ship  becomes  unsea- 
worthy  during  the  voyage  to  which  an  insurance  relates,  an  unreasonable  delay 
in  repairing  the  defect  exonerates  the  insurer  from  liability  from  any  loss 
arising  therefrom.      (R.  C.  1905,  §  6005.) 

§  657.'!.  Seaworthy  as  to  Cargo.]  A  ship  which  is  seaworthy  for  the  pur- 
pose of  an  insurance  upon  the  ship  may,  nevertheless,  by  reason  of  being  un- 
fitted to  receive  the  cargo  be  unseaworthy  for  the  purpose  of  insurance  upon 
the  cargo.     (R.  C.  1905,  $  6006.) 

§  6574.  Neutral  Papers.]  When  the  nationality  or  neutrality  of  a  ship 
or  cargo  is  expressly  warranted  it  is  implied  that  the  ship  will  carry  requisite 
documents  to  show  such  nationality  or  neutrality  ami  that  it  will  not  carry 
any  documents  which  cast  reasonable  suspicion  thereon.     (R.  I '.   1905,  ^)  6007.) 

Article  6 — The  Voyage  and  Deviation*. 
§   6575.     Voyage  Fixed    i.v    MERCANTILE   Usage.]      When    the   voyage   con- 
templated by  a  policy  is  described  by  the  places  of  beginning  and  ending,  the 
voyage  insured  is  one  which  conforms  to  the  course  from   point  to  point  fixed 
by  mercantile  usage  between  those  places.     (  R.  <'.  1905,  §  6008.) 


80  I.WSWUANCK   LAWS 

§  6576.  When  Not  so  Fixed.]  If  the  course  of  sailing  is  not  fixed  by 
mercantile  usage,  the  voyage  insured  by  a  policy  is  the  way  between  the  places 
specified,  which  to  a  master  of  ordinary  skill  and  discretion  would  seem  the 
most  natural,  direct  and  advantageous.      (R.  C.  1905,  §  6009.) 

§  6577.  Deviation  Defined.]  Deviation  is  a  departure  from  the  course 
of  the  voyage  insured  mentioned  in  the  last  two  sections,  or  an  unreasonable 
delay  in  pursuing  the  voyage;  or  the  commencement  of  an  entirely  different 
voyage.     (R.  C.  1905,  §  6010.) 

Effect  of  deviation  by  necessity  upon  policy.     58  Am.  Dec.  673. 
What  is  an  effect  of  deviation  of  vessel.     33  Am.  Dec.  60. 

§  6578.     When  Proper.]     A  deviation  is  proper: 

1.  When  caused  by  circumstances  over  which  neither  the  master  nor  the 
owner  of  the  ship  has  any  control. 

2.  When  necessary  to  comply  with  a  warranty  or  to  avoid  a  peril,  whether 
insured  against  or  not. 

3.  When  made  in  good  faith  and  upon  reasonable  grounds  of  belief  in  its 
necessity  to  avoid  a  peril;   or, 

4.  When  made  in  good  faith  for  the  purpose  of  saving  human  life  or 
relieving  another  vessel  in  distress.     (R.  C.  1905,  §  6011.) 

§  6579.  Improper.]  Every  deviation  not  specified  in  the  last  section  is 
improper.     (R.  C.  1905,  §  6012.) 

§  6580.  Insurer  Not  Liable  After.]  An  insurer  is  not  liable  for  any 
loss  happening  to  a  thing  insured  subsequently  to  an  improper  deviation.  (R. 
C.  1905,  §  6013.) 

Article  7 — Loss. 

§  6581.  Classified.]  A  loss  may  be  either  total  or  partial.  (R.  C.  1905, 
§   6014.) 

Liability  of  marine  insurer  for  loss  caused  by  explosion.  19  L.  R.  A. 
594;  38  L.  R.  A.  (N.  S.)  474. 

Effect  of  navigating  in  forbidden  waters  in  case  of  loss  within  waters 
covered  by  policy.     10  L.  R,  A.   (N.  S.)   742. 

§  6582.  Partial.]  Every  loss  which  is  not  total  is  partial.  (R.  C.  1905, 
§    6015.) 

6  6583.  Total  Loss  Classified.]  A  total  loss  may  be  either  actual  or 
constructive.     (R.  C.  1905,  §  6016.) 

§  6584.     Actual  Total.]     An  actual  total  loss  is  caused  by: 

1.  Total  destruction  of  the  thing  insured. 

2.  The  loss  of  the  thing  by  sinking  or  by  being  broken  up. 

3.  Any  damage  to  the  thing  which  renders  it  valueless  to  the  owner  for 
the  purposes  for  which  he  held  it;  or, 

4.  Any  other  event  which  entirely  deprives  the  owner  of  the  possession  at 
the  port  of  destination  of  the  thing  insured.     (R.  C.  1905,  $  6017.) 

§  6585.  Constructive  Total.]  A  constructive  total  loss  is  one  which  gives 
to  a  person  insured  a  right  to  abandon  under  section  6593.  (R.  C.  1905, 
$   6018.) 

§  6586.  When  Actual  Loss  Presumed.]  An  actual  loss  may  be  presumed 
from  the  continued  absence  of  a   ship  without  being  hoard   of;    and   the  length 


STATE  OF  NORTH  DAKOTA  81 

of  time  which  is  sufficient  to   raise  this  presumption   depends   on  the  circum- 
stances of  the  case.      (R.  C.   1905,  §  G019.) 

§  6587.  Duty  to  Procure  Another  Ship  for  Cargo.]  When  a  ship  is 
prevented  at  an  intermediate  port  from  completing  the  voyage  by  the  perils 
insured  against,  the  master  must  make  every  exertion  to  procure  in  the  same 
or  a  contiguous  port  another  ship  for  the  purpose  of  conveying  the  cargo  to 
its  destination  and  the  liability  of  a  marine  insurer  thereon  continues  after 
they  are  thus  reshipped.     (R.  C.  1905,  §  6020.) 

§  6588.  Liable  for  Cost  of  Reshipmext.]  In  addition  to  the  liability 
mentioned  in  the  last  section  a  marine  insurer  is  bound  for  damages,  expenses 
of  discharging,  storage,  reshipment,  extra  freightage  and  all  other  expenses 
incurred  in  saving  the  cargo  reshipped  pursuant  to  the  last  section  up  to  the 
amount  insured.      (R.  C.  1905,  §  6021.) 

Right  to  recover  under  "sue  and  labor"  clause  in  policy  of  marine  insur- 
ance, for  moving  cargo  overland.     14  L.  R.  A.   (N.  S.)   1161. 
§  6589.     Payment  Without  Notice.]     Upon  an  actual  total  loss  a  person 
insured   is  entitled  to  payment  without  notice  of  abandonment.      (R.   C.    1905, 
§  6022.) 

§  6590.  General  Average  Loss.]  When  it  has  been  agreed  that  an 
insurance  upon  a  particular  tiling  or  class  of  things  shall  be  free  from  par- 
ticular average  a  marine  insurer  is  not  liable  for  any  particular  average  loss 
not  depriving  the  insured  of  the  possession  at  the  port  of  destination  of  the 
whole  of  such  thing  or  class  of  things,  even  though  it  becomes  entirely  worth- 
less; but  he  is  liable  for  his  proportion  of  all  general  average  loss  assessed  upon 
the  thing  insured.     (R,  C.  1905,  §  602:0 

§  6591.  What  Agmnst  Actual  Total  Loss  Covers.]  An  insurance  con- 
fined in  terms  to  an  actual  loss  does  not  cover  a  constructive  total  loss,  but 
covers  any  loss  which  necessarily  results  in  depriving  the  insured  of  the  posses 
sion  at  the  port  of  destination  of  the  entire  thing  insured.    (R.  C.  1905,  §  6024.) 

Article  8 — Abandonment. 

§  6592.  Defined.]  Abandonment  is  the  act  by  which  after  a  constructive 
total  loss  a  person  insured  by  a  contract  of  marine  insurance  declares  to  the 
insurer  that  he  relinquishes  to  him  his  interest  in  the  thing  insured.  (R.  C. 
1905,    §    6025.) 

§  659.°..  When  Author i zed.]  A  person  insured  by  a  contract  of  marine 
insurance  may  abandon  the  thing  insured,  or  any  particular  portion  thereof, 
separately  valued  by  the  policy,  or  otherwise  separately  insured  and  recover 
for  a  total  loss  thereof  when  the  cause  of  the  less  is  a   peril  insured  against: 

1.  Tf  more  than  half  thereof  in  value  is  actually  lost  or  would  have  to  be 
expended  to  recover  it  from  the  peril. 

2.  If  it  is  injured  to  such  an  extent  as  to  reduce  its  value  more  than  one- 
half. 

3.  If  the  thing  insured,  being  a  ship,  the  contemplated  voyage  cannot  be 
lawfully  performed  without  incurring  an  expense  to  the  insured  of  more  than 
half  the  value  of  the  thing  abandoned,  or  without  incurring  a  risk  which  a 
prudent  man  would   not  take  under  the  circumstances:   or, 

4.  Tf.  the  thing  insured  being  cargo  and  freightage,  the  voyage  cannot  be 
performed  nor  another  ship  procured   by  the  master  within   a   reasonable  time 


82  INSURANCE  LAWS 

and  with  reasonable  diligence  to  forward  the  cargo  without  incurring  the  like 
expenses  Oi  risk.  But  freightage  cannot  in  any  case  be  abandoned  unless  the 
ship  is  also  abandoned.      ( R.  C.  .1905,  §  6026.) 

$  6594.  Must  be  Absolute.]  An  abandonment  must  be  neither  partial 
nor  conditional.      (R.  C.  1905,  §   6027.) 

§  6595.  When  Made.]  An  abandonment  must  be  made  within  a  reason- 
able time  after  information  of  the  loss  and  after  the  commencement  of  the 
voyage  and  before  the  party  abandoning  has  information  of  its  completion. 
(R.  C.  1905,  §  6028.) 

§  6596.  When  Becomes  Ineffectual.]  When  the  information  upon 
which  an  abandonment  has  been  made  proves  incorrect  or  the  thing  insured 
was  so  far  restored  when  the  abandonment  was  made  that  there  was  then  in 
fact  no  total  loss,  the  abandonment  becomes  ineffectual.     (R.  C.  1905,  §  6029.) 

§  6597.  Made  by  Written  Notice.]  Abandonment  is  made  by  giving 
notice  thereof  to  the  insurer  which  may  be  done  orally  or  in  writing.  (R.  C. 
1905,  §  6030.) 

§  6598.  Requisites  of  Notice.]  A  notice  of  abandonment  must  be  ex- 
plicit and  must  specify  the  particular  cause  of  the  abandonment ;  but  need 
state  only  enough  to  show  that  there  is  probable  cause  therefor  and  need  not 
be  accompanied  with  proof  of  interest  or  of  loss.      (R.  C.  1905,  §  6031.) 

§  6599.  Sustained  Only  on  Cause  Specified.]  An  abandonment  can  be 
sustained  only  upon  the  cause  specified  in  the  notice  thereof.  (R.  C.  1905, 
§   6032.) 

§  6600.  Equivalent  to  Transfer.]  An  abandonment  is  equivalent  to  a 
transfer  by  the  insured  of  his  interest  to  the  insurer  with  all  the  chances  of 
recovery  and  indemnity.      (R.  C.  1905,  §  6033.) 

§  6601.  Payment  Entitles  Insurer  to  Salvage.]  If  a  marine  insurer 
pays  for  a  loss  as  if  it  was  an  actual  total  loss,  he  is  entitled  to  whatever  may 
remain  of  the  thing  insured  or  its  proceeds  or  salvage  as  if  there  had  been  a 
formal  abandonment,     (R,  O.  1905,  §  6034.) 

§  6602.  Insured's  Agents  Become  Insurer's  on  Abandonment.]  Upon 
an  abandonment  acts  done  in  good  faith  by  those  who  were  agents  of  the 
insured  in  respect  to  the  thing  insured  subsequent  to  the  loss  are  at  the  risk 
of  the  insurer  and  for  his  benefit.     (R.  C.  1905,  §  6035.) 

§  6603.  Acceptance  of  Unnecessary.]  An  acceptance  of  an  abandon- 
ment is  not  necessary  to  the  rights  of  the  insured  and  is  not  to  be  presumed 
from  the  mere  silence  of  the  insurer  upon  his  receiving  notice  of  abandonment. 
(R.  C.  1905,  §  6036.) 

§  6604.  Acceptance  Conclusive.]  The  acceptance  of  an  abandonment. 
whether  express  or  implied,  is  conclusive  upon  the  parties  and  admits  the  loss 
ami  sufficiency  of  the  abandonment.     (R.  ('.  1905,  §  6037.) 

§  6605.  Accepted  is  Irrevocable.]  An  abandonment  once  made  and  ac- 
cepted  is  irrevocable,  unless  the  ground  upon  which  it  was  made  proves  to  be 
unfounded.      (E.  C.   1905,  §   6038.) 

§  6606.  Tii  Whom  Freightage  Belongs  After.]  On  an  accepted  aban- 
donment of  a  ship  freightage  earned  previous  to  the  loss  belongs  to  the 
insurer  thereof;  but  freightage  subsequently  earned  belongs  to  the  insurer  of 
the  ship.     (  R.  C.  19(15,  \S  6039.) 


STATE  OF  NORTH  DAKOTA  83 

§  6607.  Refusal  to  Accept.]  If  an  insurer  refuses  to  accept  a  valid 
abandonment,  lie  is  liable  as  upon  an  actual  total  loss,  deducting  from  the 
amount  any  proceeds  of  the  thing  insured  which  may  have  come  to  the  hands 
of  the  insured.     (R,  C.  1905,  §  6040.) 

§  6608.  .Rights,  if  ABANDONMENT  Omitted.]  If  a  person  insured  omits  to 
abandon  he  may,  nevertheless,  recover  his  actual  loss.     (R.  C.  1905,  §  6041.) 

Article  9 — Measure  of  Indemnity. 

§  6609.  Valuation  Conclusive  Between  Parties.]  A  valuation  in  a 
policy  of  marine  insurance  is  conclusive  between  the  parties  thereto  in  the 
adjustment  of  either  a  partial  or  total  loss,  if  the  insured  has  some  interest 
at  risk  and  there  is  no  fraud  on  his  part;  except  that  when  a  thing  has  been 
hypothecated  by  bottomry  or  respondentia  before  its  insurance  and  without 
the  knowledge  of  the  person  actually  procuring  the  insurance,  he  may  show 
the  real  value.  But  a  valuation  fraudulent  in  fact  entitles  the  insurer  to 
rescind  the  contract.     (R,  C.  1905,  §  6042.) 

§  6610.  Partial  Loss.  Liability.]  A  marine  insurer  is  liable  upon  a 
partial  loss  only  for  such  proportion  of  the  amount  insured  by  him  as  the  loss 
bears  to  the  value  of  the  whole  interest  of  the  insured  in  the  property  insured. 
(R.  C.  1905,  §  6043.) 

§  6611.  Recovery  of  Profits,  How  Estimated.]  When  profits  are  sep- 
arately insured  in  a  contract  of  marine  insurance,  the  insured  is  entitled  to 
recover  in  case  of  loss  a  proportion  of  such  profits  equivalent  to  the  proportion 
which  the  value  of  the  property  lost  bears  to  the  value  of  the  whole.  (R.  C. 
1905,   §   6044.) 

§  6612.  How  Loss  Determined  on  Valued  Policy.]  In  case  of  a  valued 
policy  of  marine  insurance  on  freightage  or  cargo,  if  a  part  only  of  the  sub- 
ject is  exposed  to  risk  the  valuation  applies  only  in  proportion  to  such  part. 
(R.  C.  1905,  §  6045.) 

§  6613.  When  Loss  of  Profits  Presumed.]  When  profits  are  valued  and 
insured  by  a  contract  of  marine  insurance,  a  loss  of  them  is  conclusively  pre- 
sumed from  a  loss  of  the  property  out  of  which  they  were  expected  to  arise  and 
the  valuation  fixes  their  amount.      (R.  C.  1905,  §  6046.) 

§  6614.  How  Loss  on  Open  Policy  Estimated.]  In  estimating  a  loss 
under  an  open  policy  of  marine  insurance  the  following  rules  are  to  be  observed: 

1.  The  value  of  a  ship  is  its  value  at  the  beginning  of  the  risk  including 
all  articles  or  charges  which  add  to  its  permanent  value  or  which  are  necessary 
to  prepare  it  for  the  voyage  insured. 

2.  The  value  of  the  cargo  is  its  actual  cost  to  the  insured,  when  laden  on 
board  or  when  that  cost  cannot  be  ascertained,  its  market  value  at  the  time 
and  place  of  lading,  adding  the  charges  incurred  in  purchasing  and  placing 
it  on  board,  but  without  reference  to  any  losses  incurred  in  raising  money  for 
its  purchase,  or  to  anv  drawback  on  its  exportation,  or  to  the  fluctuations  of 
the  market  at  the  port  of  destination,  or  to  expenses  incurred  on  the  way  or  on 
arrival. 

3.  The  value  of  freightage  is  the  gross  freightage,  exclusive  of  primage, 
without  reference  to  the  cost  of  earning  it;  and, 

4.  The  cost  of  insurance  is  in  each  case  to  be  added  to  the  value  thus 
estimated.     (R.  C.  1905,  $  6047.) 


g4  INSURANCE  LAWS 

§  6(515.  How  Partial  Loss  of  Cargo  Estimated.]  If  a  cargo  insured 
against  partial  loss  arrives  at  the  port  of  destination  in  a  damaged  condition, 
the  loss  of  the  insured  is  deemed  to  be  the  Bame  proportion  of  the  value,  which 
the  market  price  at  that  port  of  the  thing  so  damaged  bears  to  the  market 
price  it  would  have  brought  if  sound.     (R.  C.  1905,  §  6048.) 

§  (3016.  Liability  tor  Repairs  and  Labor  to  Recover.]  A  marine  insurer 
is  liable  for  all  the  expenses  attendant  upon  a  loss  which  forces  a  ship  into  port 
to  be  repaired;  and  when  it  is  agreed  that  the  insured  may  labor  for  the 
recovery  of  the  property  the  insurer  is  liable  for  the  expense  incurred  thereby; 
such  expense  in  either  case  being  in  addition  to  the  total  loss,  if  that  afterward 
occurs.      (R.  C.  1905,  $  6049.) 

§  6617.  Liability  for  Insured's  Contribution  to  General  Average.] 
A  marine  insurer  is  liable  for  a  loss  falling  upon  the  insured  through  a  con- 
tribution in  respect  to  the  thing  insured,  required  to  be  made  by  him  towards 
a  general  average  loss  called  for  by  a  peril  insured  against.  (R.  C.  1905,  § 
6050.)  ■ 

§  6618.  Subrogation  of  Right  to  Contribution.]  When  a  person  insured 
by  a  contract  of  marine  insurance  has  a  demand  against  others  for  contribution 
he  may  claim  the  whole  loss  from  the  insurer,  subrogating  him  to  his  own  right 
to  contribution.  But  no  such  claim  can  be  made  upon  the  insurer  after  the 
separation  of  the  interests  liable  to  contribution,  nor  when  the  insured,  having 
the  right  and  opportunity  to  enforce  contribution  from  others,  has  neglected  or 
waived  the  exercise  of  that  right.     (R,  C.  1905,  §  6051.) 

§  6619.  Liability  for  Partial  Loss  of  Ship.]  In  the  case  of  a  partial 
loss  of  a  ship  or  its  equipment  the  old  materials  are  to  be  applied  toward  pay- 
ment for  the  new  and  whether  the  ship  is  new  or  old  a  marine  insurer  is  liable 
for  only  two-thirds  of  the  remaining  cost  of  the  repairs,  except  that  he  must 
pay  for  anchors  and  cannon  in  full  and  for  sheathing  metal  at  a  depreciation 
of  only  two  and  one-half  per  cent,  for  each  month  that  it  has  been  fastened  to 
the  ship.     (R.  C.  1905,  §  6052.) 


CHAPTER  79. 
Fire  Insurance. 


§  6620.  Rescission  for  Alteration  in  Use  Increasing  Risk.]  An  alter- 
ation in  the  use  or  condition  of  a  thing  insured  from  that  to  which  it  is  limited 
by  the  policy,  made  without  the  consent  of  the  insurer  by  means  within  the 
control  of  the  insured  and  increasing  the  risk  entitles  an  insurer  to  rescind  a 
contract  of  fire  insurance.     (R.  C.  1905,  §  6053.) 

A  policy  limiting  the  use  of  buildings  insured  to  certain  purposes  is  void 
if  building  is  used  without  knowledge  of  insured  for  purposes  increasing 
hazard.    School  District  v.  Insurance  Co.,  7  S.  D.  458,  64  V  W.  527. 

Indications  that  building  may  be  intentionally  set  on  fire  as  an  increase 
of  insurance  risk.    :',1  L.  R.  A.  (N.  S.)  603. 

Necessity  of  proof  of  increase  of  risk  to  avoid  insurance  policy  because 
of  the  vacancy  of  insured  property.     12  L.  R.  A.  (N.  S.)  456. 
§  6621.     Not  rp   BlSK  Not  Increased.]      An  alteration  in  the  use  or  con- 


STATE  OF  NORTH  DAKOTA  85 

dition  of  a  thing  insured  from  that  to  which  it  is  limited  by  the  policy,  which 
does  not  increase  the  risk,  does  not  affect  a  contract  of  fire  insurance.  (R.  C. 
1905,  §  6054.) 

As   to   similar   provision   in    Cal.   Civ.   Code,   §    2754.      See    Stinkard   v. 

Manchester  Fire  Assur.  Co.,  122  Cal.  595,  55  Pac.  417. 

§  6622.  When  Contract  Unaffected,  Though  Risk  Increased.]  A  con- 
tract of  fire  insurance  is  not  affected  by  any  act  of  the  insured  subsequent  to 
tlic  execution  of  the  policy,  which  does  not  violate  its  provisions,  even  though  it 
increases  the  risk  and  is  the  cause  of  a  loss.     (R.  C.  1905,  §  6055.) 

§  6623.  Measure  of  Indemnity.]  If  there  is  no  valuation  in  the  policy, 
the  measure  of  indemnity  in  an  insurance  against  fire  is  the  full  amount  stated 
in  the  policy;  but  the  effect  of  a  valuation  in  a  policy  of  fire  insurance  is  the 
same  as  in  a  policy  of  marine  insurance.      (R.  C.  1905,  §  6056.) 

§  6624.  Face  of  Policy  to  be  Paid  in  Case  of  Loss.]  Whenever  any 
policy  of  insurance  shall  be  written  to  insure  any  real  property  in  this  state 
against  loss  by  fire  and  that  property  insured  shall  be  destroyed  without  fraud 
on  the  part  of  the  insured  or  his  assigns,  -the  stated  amount  of  the  insurance 
written  in  such  policy  shall  be  taken  conclusively  to  be  the  true  value  of  the 
property  insured.     (1907,  Ch.  15S.) 

§  6625.  Standard  Policy.]  No  fire  insurance  company,  corporation  or 
association,  their  officers  or  agents,  shall  make,  issue,  use  or  deliver  for  use 
any  fire  insurance  policy  or  renewal  of  any  fire  policy  on  property  in  this  state 
other  than  such  as  shall  conform  in  all  particulars  as  to  blanks,  size  of  type, 
context,  provisions,  agreements  and  conditions  with  the  printed  form  of  con- 
tract or  policy  heretofore  filed  in  the  office  of  the  commissioner  of  insurance 
as  a  standard  policy  for  this  state  and  no  other  or  different  provisions,  agree- 
ment, condition  or  clause  shall  in  any  manner  be  made  a  part  of  such  contract 
or  policy  or  be  indorsed  thereon  or  delivered  therewith,  except  as  follows, 
to-wit : 

1.  The  name  of  the  company,  its  location  and  place  of  business,  the  date 
of  its  incorporation  or  organization,  and  the  state  or  county  under  which  the 
same  is  organized,  the  amount  of  paid  up  capital  stock,  whether  it  is  a  stock 
or  mutual  company,  the  names  of  its  officers,  the  number  and  date  of  the 
policy;  and  if  it  is  issued  through  a  manager  or  agent  of  the  company,  the 
words,  "this  policy  shall  not  be  valid  until  countersigned  by  the  duly  author- 
ized manager  or  agent  of  the  company,  at " 

may  be  printed  on  policies  issued  on  property  in  tins  state. 

2.  Printed  or  written  forms  of  description  and  specifications  or  schedules 
of  the  property  covered  by  any  particular  policy  and  any  other  matter  neces- 
sary to  express  clearly  nil  the  facts  and  conditions  of  insurance  on  any  par- 
ticular risk,  which  facts  or  conditions  shall  in  no  case  be  inconsistent  with  or 
a  waiver  of  any  of  the  provisions  or  conditions  of  the  standard  policy  herein 
provided  for  may  be  written  upon  or  attached  or  appended  to  any  policy 
issued  on  property  in  this  state. 

3.  A  company,  corporation  or  association  organized  or  incorporated  under 
and  in  pursuance  of  the  laws  of  this  state,  or  elsewhere,  if  entitled  to  do  busi- 
ness in  this  state,  may  with  the  approval  of  the  commissioner  of  insurance,  if 
the  same  is  not  already  included  in  the  standard  form  as  filed  in  the  office  of 


86  INSURANCE  LAWS 

tin'  commissioner  of  insurance,  print  on  its  policies  any  provision  which  it  is 
required  by  law  to  insert  therein,  if  such  provision  is  not  in  conflict  with  the 
laws  of  this  Btate  or  the  United  States,  or  of  the  provisions  of  the  standard 
form  provided  for  herein,  but  said  [provision  shall  be  printed  apart  from  the 
other  provisions,  agreements  or  conditions  of  the  policy  and  in  type  not  smaller 
than  the  body  of  the  policy  and  under  a  separate  title,  as  follows:  "  Pro- 
visions required  by  law  to  be  stated  in  this  policy"  and  be  a  part  of  said 
policy. 

•4.  There  may  be  indorsed  on  the  outside  of  any  policy  herein  provided 
for  the  name,  with  the  word,  "agent  or  agents"  and  place  of  business,  of 
any  insurance  agent  or  agents,  either  by  writing,  printing,  stamping  or  other- 
wise. 

5.  When  two  or  more  companies,  each  having  previously  complied  with  the 
laws  of  this  state,  unite  to  issue  a  joint  policy,  there  may  be  expressed  in  the 
heading  of  such  policy  the  fact  of  the  severalty  of  the  contract;  also  the  pro- 
portion of  premiums  to  be  paid  to  each  company  and  the  proportion  of  liability 
which  each  company  agrees  to  assume.  And  in  the  printed  conditions  of  such 
policy  the  necessary  change  may  be  made  from  the  singular  to  the  plural  num- 
ber, when  reference  is  had  to  the  companies  issuing  such  policies.  (R.  C.  1905, 
§  6057.) 

Insurance  commissioner  cannot  compel  use  of  standard  policy  prepared 

by  himself.     Phenix  Ins.  Co.  v.  Perkins,  19  S.  D.  59,  101  N.  W.  1110. 

§  6626.  Construction  of  Standard  Policy.]  Policies  of  insurance  in 
the  form  prescribed  by  the  last  section  shall  be  in  all  respects  subject  to  the 
same  rules  of  construction  as  to  their  effect  or  the  waiver  of  any  of  their  pro- 
visions as  if  the  form  thereof  had  not  been  prescribed.     (R.  C.  1905,  §  6058.) 

Policy  of  insurance   cannot  be   avoided   after   loss  where  premium  was 

received  with   full  knowledge  of  factor.     Leisen  v.  St.  Paul  F.  &  M.  Ins. 

Co.,  20  N.  D.  316,  30  L.  R.  A.   (N.  S.)   539,  127  N.  W.  837. 


CHAPTER  80. 
Life  and  Health  Insurance. 

§  6627.  When  Payable.]  An  insurance  upon  life  may  be  made  payable 
on  the  death  of  the  person  or  on  his  surviving  a  specified  period,  or  periodically 
so  long  as  he  shall  live,  or  otherwise  contingently  on  the  continuance  or  termi- 
nation of  life.     (R.  C.  1905,  §  6059.) 

§  6628.  In  Whom  Person  Has  Insurable  Interest.]  Every  person  has 
an  insurable  interest  in  the  life  and  health: 

1.     Of  himself. 

i'.  Of  any  person  on  whom  he  depends  wholly  or  in  part  for  education  or 
support. 

3.  Of  any  person  under  a  legal  obligation  to  him  for  the  payment  of 
money,  or  respecting  property  or  services,  of  which  death  or  illness  might  delay 
or  prevent  the  performance;  and, 

4.  Of  any  person  upon  whose  life  any  estate  or  interest  vested  in  him 
depends.     (R.  C.   1905,  §  6060.) 


STATE  OF  NORTH  DAKOTA  87 

Conflict  of  laws  as  to  insurable  interest.     63  L.  R.  A.  856;  23  L.  R.  A. 

(N.  S.)   976. 

Insurable  in  the  life  of  another,  and  necessity  of.     57  Am.  Dee.  93;   46 

Am.  Rep.  189;  52  Am.  Rep.  135;  58  Am.  Rep.  852. 

§  6629.  Policy  TRANSFERABLE.]  A  policy  of  insurance  upon  life  or  health 
may  pass  by  transfer,  will  or  succession  to  any  person,  whether  he  has  an 
insurable  interest  or  not,  and  such  person  may  recover  upon  it  whatever  the 
insured  might  have  recovered.     (R.  C.  1905,  §  6061.) 

Policy  made  payable  to  insured  or  his  personal  representative  may  be 

willed,  but  it  is  subject  to  statutory  allowance  of  surviving  husband  or  wife 

and  minor  children.     Meyer  v.  Meyer,  25  S.  D.  596,  127  N.  W.  595. 
Assignment  of  life  insurance  policy.     87  Am.  St.  Rep.  484. 
Validity  of  assignment  of  life  insurance  policy  to  one  having  no  insur- 
able interest.     27  Am.  St.  Rep.  327;  16  Am.  St.  Rep.  906. 

§  6630.  When  Notice  op  Transfer  Unnecessary.]  Notice  to  an  insurer 
of  a  transfer  or  bequest  therefor  is  not  necessary  to  preserve  the  validity  of  a 
policy  of  insurance  upon  life  or  health,  unless  thereby  exjjressly  required.  (R. 
C.  1905,  $  6062.) 

■§  6631.  Measure  of  Indemnity.]  Unless  the  interest  of  a  person  insured 
is  susceptible  of  exact  pecuniary  measurement,  the  measure  of  indemnity  under 
a  policy  of  insurance  upon  life  or  health  is  the  sum  fixed  in  the  policy.  (R.  C. 
1905,  §  6063.) 

§  6632.  Agent  Defined.]  Any  person  who  shall  solicit  an  application  for 
insurance  upon  the  life  of  another  shall,  in  any  controversy  between  the  assured 
or  his  beneficiary  and  the  company  issuing  any  policy  upon  such  application 
be  regarded  as  the  agent  of  the  company  and  not  the  agent  of  the  assured. 
(1907,  Ch.  146.) 

§  6633.  Suicide  no  Defense  After  One  Year.]  In  all  suits  on  policies 
of  insurance  on  life  issued  by  any  regular  or  assessment  or  fraternal  beneficiary 
association,  company,  or  corporation,  doing  business  in  this  state,  it  shall  be 
no  defense  after  the  policy  has  been  in  force  one  year,  that  the  insured  com- 
mitted suicide,  and  any  provision  or  stipulation  in  the  policy  to  the  contrary 
shall  be  void.     (1911,  Ch.  157;  R,  C.  1905,  §  6064.) 

Defence  that  insured  committed  suicide  cannot  be  set  up,  when  suicide 

occurs  after   expiration   of   one   year    from    date  of  policy.      Harrington    v. 

Mutual  L.  Ins.  Co.,  21  N.  D.  447,  34  L.  R.  A.  (N.  S.)  373,  131  N.  W.  246. 
Power  of  legislature  to  forbid  defence  of  suicide  in  life  insurance.     31 

L.  R.   A.   831. 

Conflict  of  laws  as  to  suicide  provision  in  insurance  contract.     63  L.  R. 

A.  867;  23  L.  R.  A.   (N.  S.)  981. 


CHAPTER  81. 


Standard  Forms  of  Insurance   Policies;    Provisions   in   Life   Insurance 

Policies. 

§  6634.     Authority  Required  to  Issue  Policies.]     No  policy  of  life  insur- 
ance shall  be  issued  or  delivered   in  this  state  and  no  policy  of  life  insurance 


88  INSURANCE  LAWS 

of  a  life  insurance  company  organized  under  the  laws  of  this  state  shall  be 

issued  unless  authorized  by  the  provisions  of  this  .act.     (1907,  Ch.  140,  §  1.) 

§  fi635.  Standard  Poems.]  The  following  are  established  as  standard 
forms  in  which  policies  of  life  insurance  may  be  issued  and  delivered  in  this 
state,  and  in  which  policies  of  life  insurance  companies  organized  under  the 
laws  of  this  state  may  be  issued: 

NORTH  DAKOTA  STANDARD  LIFE  INSURANCE  POLICY. 
(Insert  "Ordinary"  or  "Limited    Payment.") 


Age 

Amount Premium  $ . 


.Life 


Of  North  Dakota 

In    consideration    of Dollars, 

receipt  of  which  is  hereby  acknowledged,  and  the  payment  of  (insert  amounts 
and  times  of  payments  of  premiums)  nntil  (insert  "the  death  of  the  insured" 

in   ordinary  life   and   " full   year's  premiums   shall  have  been   paid   or 

until  the  prior  death  of  the  insured"  in  limited  payment  life.) 

Promises  to  pay  upon  receipt  at  the  home  office  of  the 

company  in of  due  proof  of  death  of 

of County  of ,  State  of  North  Dakota. 

herein  called  the  insured,  to beneficiary 

with   (insert  "out"  if  so  desired)   right  of  revocation 

dollars,  less  any  indebtedness  hereon  to  the  company  and  any  unpaid  portion 
of  the  premium  for  the  then  current  policy  year. 

CHANGE  of  Benefictaey.]  When  the  right  of  revocation  has  been  reserved, 
or  in  case  of  death  of  any  beneficiary  under  either  a  revocable  or  irrevocable 
designation  the  insured  subject  to  any  existing  assignment  of  the  policy,  may 
designate  a  new  beneficiary  with  or  without  reserving  right  of  revocation  by 
filing  written  notice  thereof  at  the  home  office  of  the  company,  accompanied  by 
the  policy  for  a  suitable  endorsement  thereon.  '  If  any  beneficiary  shall  die 
before  the  insured  and  the  insured  shall  not  have  designated  a  new  beneficiary 
the  interest  of  such  beneficiary  shall  be  payable  to  the  insured,  (insert  "his" 
or  "her")  executors,  administrators  or  assigns. 

Payment  of  PREMIUMS.]  The  company  will  accept  payment  of  premiums 
at  other  times  than  as  above  stated,  as  follows: 


Except  ns  herein  provided  the  payment  of  the  premium  or  installment 
thereof  shall  not  maintain  the  policy  in  force  beyond  the  date  when  the  next 
premium  or  installment  thereof  is  payable. 

All  premiums  fire  payable  in  advance  at  said  home  office,  or  to  an  agent 
of  the  company  upon  delivery  of  the  receipt  signed  by  one  or  more  of  the 
following  officers  of  the  company  (insert  titles  of  officers  who  may  sign  receipts) 
and  countersigned  by   the  said  agent. 


STATE  OF  NOETH  DAKOTA  89 

A  grace  of  one  month  subject  to  any  interest  charge  at  the  rate  of 

per  centum  per  annum  shall  be  granted  for  the  payment  of  every  premium 
after  the  first,  during  which  month  the  insurance  shall  continue  in  force.  If 
the  insured  shall  die  during  the  month  of  grace  the  overdue  premiums  will  be 
deducted  from  any  amount  payable  hereon  in  any  settlement  hereunder. 

Conditions.]  (The  policy  may  here  provide  for  restrictions  of  liability  by 
reason  of  travel,  occupation,  change  of  residence,  and  suicide.  These  restric- 
tions such  as  refer  to  military  and  naval  services  in  time  of  war,  must  be 
applicable  only  to  cases  where  the  act  of  the  insured  provided  against  occurs 
within  two  years  after  the  issuance  of  the  policy.) 

Incontestability.]  The  policy  constitutes  the  entire  contract  between  the 
parties  and  shall  be  incontestable  from  its  date  except  for  non-payments  of 
premiums  and  except  as  otherwise  provided  in  this  policy.  All  statements 
made  by  the  insured  shall  in  the  absence  of  fraud  be  deemed  representations 
and  not  warranties,  and  no  such  statement  shall  void  this  policy  unless  it  is 
contained  in  written  application  and  a  copy  of  such  a] 'plication  shall  be 
endorsed  upon  or  attached  to  this  policy  when  issued.  If  the  age  of  the  in- 
sured has  been  understated  the  amount  payable  hereunder  shall  be  such  as 
the  premium  paid  would  have  purchased  at  the  correct  age. 

Participation.]  This  policy  shall  participate  in  the  surplus  of  the  com- 
pany ami  beginning  not  later  than  the  end  of  the  (insert  first,  second  or  third) 
policy  year  the  company  will  annually  determine  and  account  for  the  portion 
of  the  divisible  surplus  accruing  hereon. 

Dividends.]     Dividends  at  the  option  of  the  owner  of  this  policy  shall  on 

the day   of of   each   year    (here   may   be 

inserted  "after  the  first  policy  year"  or  "after  the  second  policy  year")  be 
either : 

1.  Paid  in  cash,  or, 

2.  Applied  toward  payment  of  any  premium  or  premiums,  or, 

3.  Applied  to  the  purchase  of  paid-up  additions  to  the  policy,  or, 

4.  Left  to  accumulate  to  the  credit  of  the  policy  with  interest  at  (here 
insert  a  rate  not  exceeding  that  used  by  the  company  for  calculating  its 
reserves)  per  centum  per  annum  and  payable  at  the  maturity  of  the  policy, 
hut  withdrawable  at  the  anniversary  of  the  policy. 

Unless  the  owner  of  the  policy  shall  elect  otherwise  within  three  months 
after  the  mailing  by  the  company  of  a  written  notice  requiring  such  election 
the  dividends  shall  be  paid  in  cash. 

Loans.]  After  three  full  years'  premiums  have  been  paid,  the  company  at 
any  time,  while  this  policy  is  in  force,  will  advance,  on  proper  assignment  of 
this  policy,  and  on  the  sole  security  thereof  at  a  rate  of  interest  not  greater 

than per  centum  per  annum,  which  interest  if  not  paid  annually  shall 

be  added  to  the  principal  and  bear  the  same  rate  of  interest,  a  sum  equal  to, 
or,  at  the  option  of  the  owner  of  the  policy,  less  than  the  reserve  at  the  end  of 
the  current  policy  year  on  this  policy  and  on  any  dividend  additions  thereto, 
computed  according  to  the  (designate  mortality  table  adopted  by  the  com- 
pany for  computing  reserve)  mortality  table  and  interest  at  the  rate  of  (desig- 
nate rate  of  interest  adopted  by  the  company  for  computing  reserves)  per 
centum  per  annum,  less  (here  may  be  inserted  not  more  than  two  and  one-half) 


90  INSURANCE  LAWS 

per  centum  of  the  amount  insured  by  this  policy  and  of  the  dividend  .additions 
Miorofco. 

The  company,  however,  will  deduct  from  such  loan  value  any  existing  in- 
debtedness to  the  company  on  the  policy  and  any  unpaid  balance  of  the  pre- 
mium for  the  current  policy  year,  and  may  collect  interest  in  advance  on  the 
loan  to  the  end  of  the  current  policy  year.  Such  loan  may  be  deferred  by  the 
company  for  not  exceeding  six  months  after  the  application  therefor  is  made. 
Failure  to  repay  any  such  advance  or  to  pay  interest  shall  not  void  this  policy 
unless  the  total  indebtedness  hereon  to  the  company  shall  be  equal  or  exceed 
such  loan  value  at  the  time  of  such  failure  and  until  one  month  after  notice 
shall  have  been  mailed  by  the  company  to  the  last  known  address  of  the 
insured  and  of  the  assignee,  if  any.  No  condition  other  than  as  herein  pro- 
vided shall  be  exacted  as  a  prerequisite  to  any  such  advance. 

Assignment.]  No  assignment  of  this  policy  shall  be  binding  upon  the 
company  until  it  be  filed  with  the  company  at  its  said  home  office.  The  com- 
pany assumes  no  responsibility  as  to  validity  of  any  assignment. 

Option  op  Surrender  or  Lapse.]  After  this  policy  shall  have  been  in 
force  three  years  the  owner,  within  one  month  after  any  default  may  elect  (a) 
to  accept  the  value  of  this  policy  in  cash,  or,  (b)  to  have  the  insurance  con- 
tinued in  force  from  date  of  default,  without  future  participation  and  without 
the  right  to  loan,  for  its  face  amount,  including  any  outstanding  dividend 
additions,  less  any  indebtedness  to  the  company  thereon,  or,  (c)  to  purchase 
non-participating  paid-up  insurance  payable  at  the  same  time  and  on  the  same 
conditions  as  this  policy. 

The  cash  value  will  be  the  reserve  at  the  date  of  default  on  this  policy,  and 
on  any  dividend  additions  thereto,  computed  according  to  the  (designate  mor- 
tality table  adopted  by  the  company  for  computing  reserves)  mortality  table 
and  interest  at  the  rate  of  (designate  rate  of  interest  adopted  by  the  company 
for  computing  reserves)  per  centum  per  annum,  less  (here  may  be  inserted  not 
more  than  two  and  one-half)  per  centum  of  the  amount  insured  by  this  policy 
and  of  any  dividend  additions  thereto,  and  less  any  existing  indebtedness  to 
the  company  on  this  policy.  Payment  of  such  cash  value  may  be  deferred  by 
the  company  for  not  exceeding  six  months  after  the  application  therefor  is 
made.  The  term  for  which  the  insurance  will  be  continued  or  the  amount  of 
the  paid-up  policy  will  be  such  as  the  cash  value  will  purchase  as  a  net  single 
premium  at  the  attained  age  of  insured  according  to  the  (designate  the  mor- 
tality table  adopted  by  the  company  for  computing  reserves)  mortality  table 
and  interest  at  the  rate  of  (designate  rate  of  interest  adopted  by  the  company 
for  computing  reserves)  per  centum  per  annum.  If  the  owner  shall  not,  within 
one  month  from  default,  surrender  this  policy  to  the  company  at  its  home  office 
for  a  cash  surrender  value  or  for  paid-up  insurance  as  provided  in  options  (a) 
and  (c)  the  insurance  will  be  continued  as  provided  in  option  (b). 

The  figures  in  the  following  table  are  computed  in  accordance  with  the 
above  provisions  and  upon  the  assumption  that  there  is  no  indebtedness  on  the 
policy,  and  that  there  are  no  outstanding  dividend  additions. 

(At  the  option  of  the  company  the  following  may  be  here  inserted:     "The 

figures  apply  to  a  policy  for  $1,000.     As  this  contract  is  for  $ the  loan, 

cash,  or  paid  insurance  available  in  any  year  will  be  $ ,  the  amount 

stated  in  the  table  for  that  year:") 


STATE  OF  NOETH  DAKOTA  91 

At  Lnd  of  Cash  or  Loan  Paid-up  Life  Continued  Insurance 

Year  Value  Insurance  Years       Months       Days 


3.    $. 


5.  $ $ $. 

6.  $ $ $. 

7.  $ $ :  $. 


8.  $ $ $. 

9.  $ $ $. 

10.  $ $ $. 

11.  $ $ $. 


12.  $ $ $. 

13.  $ $ $. 


14.  $ $. 

15.  $ $. 

16.  $ $. 

17.  $ $. 


18.  $ $ $. 

19.  $ $ .$. 


20.    $ $ $ 

(Figures  for  later  years  will  be  furnished  upon  request.) 

Reinstatement.]  In  case  of  continued  temporary  insurance  under  the 
above  provisions  this  policy  upon  evidence  of  insurability  satisfactory  to  the 
company  may  be  reinstated  within  the  first  three  years  of  the  term  for  which 
the  insurance  is  continued  by  payment  of  arrears  of  premiums  with  interest  at 
(here  insert  not  more  than  six)  per  centum  per  annum. 

Options  at  Maturity.]  The  insured,  by  written  notice  to  the  company  at 
its  home  office,  and  with  the  written  consent  of  the  assignee  and  irrevocable 
beneficiary,  if  any,  may  elect  to  have  the  net  sum  payable  under  this  policy 
paid  either  in  cash  or  as  follows: 

1.  By  the  payment  of  interest  thereon  at   per  centum  per  annum 

I 'livable  annually,  to  the  payee  under  this  policy  at  the  end  of  each  year  during 
the  life  of  the  payee  and  by  the  payment  upon  the  death  of  the  payee  of  the 
said  net  sum  and  accrued  interest  to  the  executors,  administrators  or  assigns 
of  the  payee,  unless  otherwise  directed  in  said  notice. 

2.  By  the  payment  of  equal  annual  installments  for  a  specified  number  of 
years,  the  first  installment  being  payable  immediately,  in  accordance  with  the 
following  table  for  each  $1,000  of  said  net  sum. 

3.  By  the  payment  of  equal  annual  installments  payable  at  the  beginning 
of  each  year  for  a  fixed  period  of  twenty  years  and  for  so  many  years  longer 
as  the  payee  shall  survive  in  accordance  with  the  following  table  for  each  $1,000 
of  said  net  sum. 

Installments  payable  under  options  two  or  three  which  shall  not  have  been 
paid  prior  to  the  death  of  the  payee  shall  be  paid,  unless  otherwise  directed  in 
said   notice,  to  the  executors,  administrators  or  assigns  of  the  payee. 

If  the  insured  shall  not  have  directed  otherwise,  the  beneficiary  may,  after 
the  death  of  the  insured,  by  like  written  notice,  and  with  the  written  consent 
of  the  assignee,  if  any,  select  either  of  the  above  options. 

Unless   otherwise  specified  by  the  insured   the   payee  may   on    any   interest 


02  INSURANCE  LAWS 

date  receive  the  amount  yet  due  under  option  one,  and  may  at  any  time  receive 
the  commuted  value  of  payments  yet  to  be  made,  computed  upon  the  same  basis 
as  option  two  in  the  following  table,  provided  that  no  such  commutation  will 
be  made  under  three,  except  after  the  death  of  the  payee  occurring  within  the 
aforesaid  twenty  years. 

TABLE  OF  INSTALLMENTS  FOR  EACH  $1,000. 

Age  of  Payee 

Number  of  Annual       Amount  of  Each                      When  Policy  Amount  of  Eaeb 

Installments                Installment                        Becomes  Payable  Installment 
$ $ 


$ $• 

$ $. 


$ $. 

$ $. 


.$ $. 

$ $. 

$ $. 

$ $. 


$ $. 

$ $. 


$ $. 

$ $. 

$ $. 

$ $. 

$ $. 


$ $. 

$ $. 

$ $. 

$ $. 


Agents  are  not  authorized  to  modify  this  policy  or  extend  time  for  paying 
a  premium. 

In  witness  whereof  the  company  has  caused  this  policy  to  be  executed  this 
day  of 

NORTH  DAKOTA  STANDARD  LIFE  INSURANCE  POLICY. 
Endowment. 

Age 

Amount  $ Premium  $ 


of  North  Dakota. 

In  consideration  of dollars,  receipt  of  which  is  hereby 

acknowledged,  and  the  payment  of  (here  insert  amounts  and  times  of  payments 

of  premiums)    until full  year's  premiums  shall  have  been  paid  or  unti'i 

the  prior  death  of  the  insured. 

Promise  to  pay  at  the  home  office  of  the  company  in 

to of ».  .  .County    of State    of 

North  Dakota,  herein  called  the  insured,  on  the dav  of 


STATE  OF  NORTH  DAKOTA  93 

if  the  insured  be  then  living,  or  upon  receipt  at  said  home 

office  of  due  record  |  proof)  of  the  prior  death  of  the  insured,  to 

beneficiar.  .  .,  with   (insert  "out"  if  so  desired)   right  of  revocation, ■ 

dollars,  less  any  indebtedness  hereon  to  the  company  and  any  unpaid  portion 
of  the  premium  for  the  then  current  policy  year. 

Change  of  Beneficiary.]  When  the  right  of  revocation  has  been  reserved 
or  in  case  of  the  death  of  'any  beneficiary  under  either  a  revocable  or  irrev- 
ocable designation,  the  insured,  subject  to  any  existing  assignment  of  the 
policy,  may  designate  a  new  beneficiary  with  or  without  reserving  right  of 
revocation  by  filing  written  notice  thereof  at  the  home  office  of  the  company 
accompanied  by  the  policy  for  suitable  endorsement  thereon.  If  any  beneficiary 
shall  die  before  the  insured,  and  the  insured  shall  not  have  designated  a  new 
beneficiary,  the  interest  of  such  beneficiary  shall  be  payable  to  the  insured 
(insert  "his"  or  "her")   executors,  administrators  or  assigns. 

PAYMENTS  OF  PREMIUMS.]  The  company  will  accept  payments  of  premiums 
at  other  times  than  as  stated  above,  as  follows: 


Except  as  herein  provided  the  payment  of  a  premium  or  installment  thereof 
shall  maintain  the  policy  in  force  beyond  the  date  when  the  next  premium  or 
installment  thereof  is  payable. 

All  premiums  are  payable  in  advance  at  the  said  home  office  or  to  any 
agent  of  the  company  upon  delivery  of  a  receipt  signed  by  one  or  more  of  the 
following  officers  of  the  company  (insert  titles  of  officers  who  may  sign  re- 
ceipts), and  countersigned  by  said  agent. 

A  grace  of  one  month  subject  to  an  interest  charge  at  the  rate  of 

per  centum  per  annum,  shall  be  granted  for  the  payment  of  every  premium 
after  the  first,  during  which  month  the  insurance  shall  continue  in  force.  If 
the  insured  shall  die  during  the  month  of  grace  the  overdue  premium  will  be 
deducted  from  any  amount  payable  hereon  in  any  settlement  hereunder. 

CONDITIONS.]  (The  policy  may  here  provide  for  restriction  of  liability  by 
reason  of  travel,  occupation,  change  of  residence,  and  suicide.  These  restric- 
tions, except  such  as  refer  to  military  and  naval  service  in  time  of  war,  must 
be  applicable  only  to  cases  where  the  act  of  the  insured  provided  against  occurs 
within  two  years  after  the  issuance  of  the  policy.) 

Incontestability.]  This  policy  constitutes  the  entire  contract  between  the 
parties  and  shall  be  incontestable  from  its  date,  except  for  non-payment  of 
premiums  and  except  as  otherwise  provided  in  this  policy.  All  statements 
made  by  the  insured  shall,  in  the  absence  of  fraud,  be  deemed  representations 
and  not  warranties,  and  no  BUCh  statement  shall  void  this  policy  unless  it  is 
contained  in  a  written  application  and  a  cony  of  such  application  shall  be 
indorsed  upon  or  attached  to  this  policy  when  issued.  If  the  age  of  the  in- 
sured has  been  understated,  the  amount  payable  hereunder  shall  lie  such  as 
the  premium  paid  would  have  purchased  at  the  correct  age. 

Participation.]  This  policy  shall  participate  in  the  surplus  of  the  com- 
pany and  beginning  not  later  than  the  end  of  the  (insert  first,  second  or  third) 
policy  year  the  company  will  annually  determine  and  account  for  the  portion 
of  the  divisible  surplus  accruing  hereon. 

Dividends.]     Dividends  at  the  option  of  the  owner  of  this  policy  shall  on 


94  INSURANCE  LAWS 

the day  of of  each  year   (here  may  be  inserted 

"after  the  first  policy  year''  or  ''after  the  second  policy  year")  be  either: 

1.  Paid    in   cash,  or. 

2.  Applied  toward  the  payment  of  any  premium  or  premiums,  or,. 
:;.     Applied  to  the  purchase  of  paid-up  additions  to  the  policy,  or, 

4.  Left  to  accumulate  to  the  credit  of  the  policy  with  the  interest  at  (here 
insert  a  rate  not  exceeding  that  used  by  the  company  in  calculating  its  reserves) 
per  ceutum  per  annum  and  payable  at  the  maturity  of  the  policy,  but  with- 
drawable on  any  anniversary  of  the  policy. 

Unless  the  owner  of  this  policy  shall  elect  otherwise  within  three  months 
after  the  mailing  by  the  company  of  a  written  notice  requiring  such  election, 
the  dividends  shall  be  paid  in  cash. 

Loans.]  After  three  full  years'  premiums  have  been  paid  the  company  at 
any  time  while  this  policy  is  in  force,  will  advance,  on  proper  assignment  of 
the  policy  and  on  the  sole  security  thereof,  at  a  rate  of  intereft  not  greater 

than per  centum  per  annum,  which  interest  if  not  paid  annually  shall 

lie  added  to  the  principal  and  bear  the  same  rate  of  interest,  a  sum  equal  to, 
or,  at  the  option  of  the  owner  of  the  policy,  less  than,  the  reserve  at  the  end 
of  the  current  policy  year,  on  this  policy  and  on  any  dividend  additions  thereto, 
computed  according  to  the  (designate  mortality  table  adopted  by  the  com- 
pany for  computing  reserves)  mortality  table,  and  interest  at  the  rate  of 
(designate  rate  of  interest  adopted  by  the  company  for  computing  reserves) 
per  centum  per  annum,  less  (here  may  be  inserted  not  more  than  two  and  one- 
half)  per  centum  of  the  amount  insured  by  this  policy  and  of  any  dividend 
additions  thereto.  The  company,  however,  will  deduct  from  such  loan  value 
any  existing  indebtedness  to  the  company  on  this  policy,  and  any  unpaid  bal- 
ance of  the  premium  for  the  current  policy  year,  and  may  collect  interest  in 
advance  on  the  loan  to  the  end  of  the  current  policy  year.  Such  loan  may  be 
deferred  by  the  company  for  not  exceeding  six  months  after  the  application 
therefor  is  made.  Failure  to  repay  any  such  advance  or  to  pay  the  interest 
shall  not  void  this  policy  unless  the  total  indebtedness  hereon  to  the  company 
shall  equal  or  exceed  such  loan  value  at  the  time  of  such  failure  and  until  one 
month  after  notice  shall  have  been  mailed  by  the  company  to  the  last  known 
address  of  the  insured  and  of  the  assignee,  if  any. 

No  conditions  other  than  as  herein  provided  shall  be  exacted  as  a  pre- 
requisite to  any  such  advance. 

Assignment.]  No  assignment  of  this  policy  shall  be  binding  upon  the 
company  until  it  be  filed  with  the  company  at  its  said  home  office.  The  com- 
pany assumes  no  responsibility  as  to  the  validity  of  any  assignment. 

Options  on  Surrender  or  Lapse.]  After  this  policy  shall  have  been  in 
force  three  full  years  the  owner,  within  one  month  after  any  default,  may  elect 
(a)  to  accept  the  value  of  this  policy  in  cash,  or,  (b)  to  have  the  insurance 
continue  in  force  from  date  of  default  without  future  participation  and  without 
the  right  to  loans,  for  its  face  amount,  including  any  outstanding  dividend 
additions,  less  any  indebtedness  to  the  company  hereon,  or,  (e)  to  purchase 
uon-participating  paid-up  insurance  payable  at  the  same  times  and  on  tin'  same 
conditions  as  this  policy.  The  cash  value  will  be  the  reserve  at  the  date  of 
default  on  this  policy  am!  on  any  dividend  additions  thereto  computed  accord- 
ing to  the   (designate  mortality  table  adopted  by  the  company  for  computing 


STATE  OF  NOETH  DAKOTA  95 

reserves)  mortality  table  and  interest  at  the  rate  of  (designate  rate  of  interest 
adopted  by  the  company  for  computing  reserves)  per  centum  per  annum  less 
(here  may  be  inserted  not  more  than  two  and  one-half)  per  centum  of  the 
amount  insured  by  this  policy  and  of  any  dividend  additions  thereto,  and  less 
any  existing  indebtedness  to  the  company  on  this  policy.  Payment  of  such 
cash  value  may  be  deferred  by  the  company  for  not  exceeding  six  months  after 
the   application   therefor   is   made. 

The  term  for  which  the  insurance  will  be  continued  or  the  amount  of  the  paid- 
up  policy  will  be  such  as  the  cash  value  will  purchase  as  a  net  single  premium 
at  the  attained  age  of  the  insured,  according  to  the  (designate  the  mortality 
table  adopted  by  the  company  for  computing  reserves)  mortality  table  and 
interest  at  the  rate  of  (designate  rate  of  interest  adopted  by  the  company  for 
computing  reserves)  per  centum  per  annum.  If  the  sum  applicable  to  the  pur- 
chase of  temporary  insurance  shall  be  more  than  sufficient  to  continue  the 
insurance  to  the  end  of  the  endowment  term  named  in  this  policy  the  excess 
shall  be  used  to  purchase  in  the  same  manner  non-participating  paid-up  pure 
endowment,  payable  at  the  end  of  the  endowment  term  and  on  the  same  con- 
ditions. If  the  owner  shall  not,  within  one  month  from  default  surrender  this 
policy  to  the  company  at  the  home  office  for  a  cash  surrender  value  or  for 
paid-up  insurance  as  provided  in  options  (a)  and  (c)  the  insurance  will  be 
continued  as  provided  in  option  (b). 

The  figures  in  the  following  table  are  computed  in  accordance  with  the  above 
provisions  and  upon  the  assumption  that  there  is  no  indebtedness  on  the  policy, 
and  tnat  there  are  no  outstanding  dividend  additions. 

(At  the  option  of  the  company  the  following  may  be  here  inserted:     "The 

figures  apply  to  a  policy  of  $1,000.     As  this  contract  is  for  $ , 

the  loan,  cash,  paid-up  insurance  on  pure  endowment  available  in  any  year  will 

be the  amount  stated  in  the  table  for  this  year.") 

Paid-up  Pure 

At  End  of     Cash  or  Loan  Endowment  Continued  Insurance  Endow- 

Year  Value  Insurance       Years  Months  Days  ment 

.",.     $ $ $ $ 

4.  $ $ $ $ 

5.  $ $ $ $ 

6.  $ $ $ $ 

7.  $ $ $ $ 


9.  $ $ $. 

10.  $ $ $. 

11.  $ $ $. 

12.  $ $ $. 


]  3.  $ $ $ $ . 

14.  $ $ $ $ . 

15.  $ $ $ $. 

16.  $ $ $ $ . 

17.  $ $ $ $ . 

18.  $ $ $ $ . 

19.  $ $ $ $. 

20.  $ $ $ $. 

(Figures  for  later  years  will  be  furnished  upon  request.) 


96  INSURANCE  LAWS 

Reinstatement.]  In  case  of  continued  temporary  insurance  under  the 
above  provision  this  policy  upon  evidence  of  insurability  satisfactory  to  the 
company  may  be  reinstated  within  the  first  three  years  of  the  term  for  which 
the  insurance  is  continued,  by  payment  of  arrears  of  premiums  with  interest 
at  (here  insert  uot  greater  than  six)  per  centum  per  annum. 

Options  at  Maturity.]  The  insured,  by  written  notice  to  the  company  at 
its  home  office,  and  with  written  consent  of  the  assigned  and  irrevocable  bene- 
ficiary, if  any,  may  elect  to  have  the  net  sum  payable  under  the  policy  paid 
either  in  cash  or  as  follows: 

1.  By  the  payment  of  interest  thereon  at   per  centum  per  annum 

payable  annually,  to  the  payee  under  this  policy  at  the  end  of  each  year  during 
the  life  of  the  payee  and  by  the  payment  upon  the  death  of  the  payee  of  the 
said  net  sum  and  accrued  interest  to  the  executors,  administrators  or  assigns 
of  the  payee,  unless  otherwise  directed  in  said  notice. 

2.  By  the  payment  of  equal  annual  installments  for  a  specified  number  of 
years,  the  first  installment  being  payable  immediately  in  accordance  with  the 
following  table  for  each  $1,000  of  said  net  sum. 

3.  By  the  payment  of  equal  annual  installments  payable  at  the  beginning 
of  each  year  for  a  fixed  period  of  twenty  years,  and  for  so  many  years  longer 
as  the  payee  shall  survive,  in  accordance  with  the  following  table  for  each 
$1,000  of  said  net  sum. 

Installments  payable  under  options  2  or  3  which  shall  not  have  been  paid 
prior  to  the  death  of  the  payee,  shall  be  paid,  unless  otherwise  directed  in  said 
notice,  to  the  executors,  administrators  or  assigns  of  the  payee. 

If  the  insured  shall  not  have  directed  otherwise  the  beneficiary  may,  after 
the  death  of  the  insured,  by  like  written  notice,  and  with  the  written  consent 
of  the  assignee,  if  any,  select  either  of  the  above  options. 

Unless  otherwise  specified  by  the  insured  the  payee  may  on  any  interest 
date  receive  the  amount  yet  due  under  option  1,  and  may  at  any  time  receive 
the  commuted  value  of  payments  yet  to  be  made,  computed  upon  the  same  basis 
as  option  2  in  the  following  table,  provided  that  no  such  commutation  will  be 
made  under  3  except  after  the  death  of  the  payee  occurring  within  the  afore- 
said  twenty  years. 

TABLE  OF  INSTALLMENTS   FOR   EACH  $1,000. 

Option  2.  Option  3. 

Age  of  Payee 
Number  of  Annual       Amount  of  J-Zueh  When  Policy  Amount  of  Each 

Installments  Installment  Becomes  Payable  Installment 

$ $ 

$ $ 

$ $ 

$ $ 

$ $ 

$ $ 

$ $ 

$ $ 

$ $ 

$ $ 


STATE  OF  NORTH  DAKOTA  97 


$ $■ 

$ $. 

$ $• 


$ $ 

Agents  are  not  authorized  to  modify  this  policy  or  to  extend  the  time  for 
(laying  a  premium. 

In  witness  whereof  the  company  has  caused  this  policy  to  be  executed  this 
day  of 

NORTH  DAKOTA  STANDARD  LIFE  INSURANCE  POLICY. 
(Insert   "Ordinary"   or   "Limited    Payment")    Life   Fixed    Survivorship    An- 
nuity. 

Age 

Amount  $ Premium  $ 


of  North  Dakota. 

In  consideration  of dollars,  receipt  of  which  is  hereby 

acknowledged,  and  of  the  payment  of  (here  insert  amounts  and  times  of  pay- 
ments of  premium)   until   (insert  "the  death  of  the  insured"  in  ordinary  life 

and  " full  year's  premiums  shall  have  been  paid  or  until  the  prior 

deatli  of  the  insured"  in  limited  payment  life.) 

Promise  to  pay  at  its  home  office   in 

dollars  in  twenty  equal  annual   installments  of 

$ to (herein    called    the   beneficiary,) 

(insert  "his"  or  "her")  executors,  administrators  or  assigns,  with  (insert 
"out"  if  so  desired)  right  of  revocation,  if  (insert  "he"  or  "she")  survives 
the  insured  (otherwise  to  the  executors,  administrators  or  assigns  of  the  in- 
sured) the  first  installment  being  payable  immediately  upon  receipt  of  due 
proof  of  the  death  of  the  insured,  any  indebtedness  to  the  company  on  this 
policy,  together  with  the  balance,  if  any,  of  the  then  current  year's  premium 
being  deducted  from  the  amounts  first  payable  under  this  contract. 

Should  the  beneficiary  live  to  receive  the  twenty  installments  payable  to 
("insert  "him"  or  "her")  as  above  provided,  the  company  will  pay  (insert 
"him"  or  "her")  annually  during  the  remainder  of  (insert  "his"  or  "her") 

life  the  sum  of  $ beginning  one  year  after  tin'  date  when  the 

twentieth  installment  payable  hereunder  shall  fall  due. 

Change  OF  BENEFICIARY.]  When  the  rigid  of  revocation  has  been  reserved, 
oi-  in  case  of  the  death  of  any  beneficiary  under  either  a  revocable  or  irrevocable 
designation,  the   insured   subject  to   any   existing  assignment   of  the  policy   may 


98  INSURANCE  LAWS 

designate  a  new  beneficiary  with  or  without  reserving  right  of  revocation,  by 
filing  written  notice  thereof  at  the  home  office  of  the  company,  accompanied 
by  the  policy  for  suitable  indorsement  thereon.  If  any  beneficiary  shall  die 
before  the  insured  and  the  insured  shall  not  have  designated  a  new  beneficiary, 
the  interests  of  such  beneficiary  shall  be  payable  to  the  insured,  (insert  "his" 
or  "her")  executors,  administrators  or  assigns.  If  a  new  beneficiary  shall  be 
designated  only  twenty  annual  installments  will  be  payable  under  this  policy, 
and  future    (if  necessary,  insert   "semi"   or   "quarterly")    annual   premiums 

will  be  reduced  to dollars  each. 

Payment  op  Premiums.]     The  company  will  accept  payment  of  premiums 
at  other  times  than  as  stated  above,  as  follows: 


Upon  return  of  this  policy  to  the  company  accompanied  by  evidence  satisfactory 
to  the  company  of  the  death  of  the  beneficiary  the  company  will  reduce  the 
future  (here  insert  "annual,"  "semi-annual"  or  "quarterly")  premium  to 
$ each. 

Except  as  herein  provided  the  payment  of  a  premium  or  installment  thereof 
shall  not  maintain  the  policy  in  force  beyond  the  date  when  the  next  premium 
or  installment  thereof  is  payable. 

All  premiums  are  payable  in  advance  at  said  home  office,  or  to  an  agent 
of  the  company  upon  delivery  of  a  receipt  signed  by  one  or  more  of  the  fol- 
lowing officers  of  the  company  (insert  titles  of  officers  who  may  sign  receipts) 
and  countersigned  by  said  agent. 

A  grace  of  one  month  subject  to  an  interest  charge  at  the  rate  of 

per  centum  per  annum  shall  be  granted  for  the  payment  of  every  premium  after 
the  first,  during  which  month  the  insurance  shall  continue  in  force.  If  the 
insured  shall  die  during  the  month  of  grace  the  overdue  premium  will  be 
deducted  from  any  amount  payable  hereon  in  any  settlement  hereunder. 

Conditions.]  (The  policy  may  here  provide  for  restriction  of  liability  by 
reason  of  travel,  occupation,  change  of  residence,  and  suicide.  The  restrictions, 
except  such  as  refer  to  military  and  naval  service  in  time  of  war,  must  be 
applicable  only  to  cases  where  the  act  of  the  insured  provided  against  occurs 
within  two  years  after  the  issuance  of  the  policy.) 

Incontestability.]  This  policy  constitutes  the  entire  contract  between  the 
parties  and  shall  be  incontestable  from  its  date,  except  for  non-payment  of 
premiums  and  except  as  otherwise  provided  in  this  policy.  All  statements 
made  by  the  insured  shall,  in  the  absence  of  fraud,  be  deemed  representations 
and  not  warranties,  and  no  such  statement  shall  void  this  policy  unless  it  is 
contained  in  a  written  application  and  a  copy  of  such  application  shall  be 
indorsed  upon  or  attached  to  this  policy  when  issued. 

If  the  age  of  the  insured  has  been  understated  or  if  the  age  of  the  bene- 
ficiary has  been  overstated,  the  amount  payable  hereunder  shall  be  such  as  the 
premium  paid  would  have  purchased  at  the  correct  age. 

Participation.]  This  policy  shall  participate  in  the  surplus  of  the  com- 
pany ami  beginning  not  later  than  the  end  of  the  (insert  first,  second  or  third) 
policy  year  the  company  will  annually  determine  and  account  for  the  portion 
of  the  divisible  surplus  accruing  hereon. 


STATE  OF  NORTH  DAKOTA  99 

Dividends.]     Dividends  at  the  option  of  the  owner  of  this  policy  shall  on 

the day  of of  each  year   (here  may  be  inserted 

"after  the  first  policy  year"  or  "after  the  second  policy  year")  be  either: 

1.  Paid  in  cash,  or, 

2.  Applied  toward  the  payment  of  any  premium  or  premiums,  or, 

3.  Applied  to  the  purchase  of  paid-up  additions  to  the  policy,  payable  in 
twenty  annual  installments  at  the  same  times  as  the  original  amount  insured 
under  this  policy  is  payable.  The  payments  of  such  twenty  installments  shall 
discharge  the  company  from  all  liability  on  account  of  such  dividend  addi- 
tions, or, 

4.  Left  to  accumulate  to  the  credit  of  the  policy  with  interest  at  (here 
insert  a  rate  not  exceeding  that  used  by  the  company  in  calculating  its  re- 
serves) per  centum  per  annum  and  payable  at  the  maturity  of  the  policy,  but 
withdrawable  on  any  anniversary  of  the  policy. 

Unless  the  owner  of  this  policy  shall  elect  otherwise  within  three  months 
after  the  mailing  by  the  company  of  a  written  notice  requiring  such  election, 
the  dividends  shall  be  paid  in  cash. 

Loans.]  After  three  full  years'  premiums  have  been  paid  the  company  at 
any  time,  while  this  policy  is  in  force,  will  advance,  on  the  proper  assignment 
of  this  policy  and  on  the  sole  security  thereof,  at  a  rate  of  interest  not  greater 

than per  centum  per  annum,  which  interest  if  not  paid  annually  shall 

be  added  to  the  principal  and  bear  the  same  rate  of  interest,  a  sum  equal  to, 
or,  at  the  option  of  the  owner  of  the  policy,  less  than,  the  reserve  at  the  end 
of  the  current  policy  year  required  to  provide  for  the  twenty  installments  pay- 
able under  this  policy  and  for  any  dividend  additional  thereto  and  no  more, 
computed  according  to  the  (designate  mortality  table  adopted  by  the  company 
for  computing  reserves)  mortality  table  and  interest  at  the  rate  of  (designate 
rate  of  interest  adopted  by  the  company  for  computing  reserves)  per  centum 
per  annum,  less  (here  may  be  inserted  not  more  than  two  and  one-half)  per 
centum  per  annum  of  the  amount  insured  by  the  policy,  and  of  any  dividend 
additions  thereto.  The  company  will  deduct,  however,  from  such  loan  value 
any  existing  indebtedness  to  the  company  on  the  policy  and  any  unpaid  balance 
of  the  premium  for  the  current  policy  year  and  may  collect  interest  in  advance 
on  the  loan  to  the  end  of  the  current  policy  year.  Such  loan  may  be  deferred 
by  the  company  for  not  exceeding  six  months  after  the  application  therefor 
is  made.  Failure  to  repay  any  such  advance  or  to  pay  interest  shall  not  void 
this  policy  unless  the  total  indebtedness  hereon  to  the  company  shall  equal  or 
exceed  such  loan  value  at  the  time  of  such  failure,  and  until  one  month  after 
notice  shall  have  been  mailed  by  the  company  to  the  last  known  address  of  the 
insured  and  of  the  assignee,  if  any.  No  condition  other  than  as  herein  pro- 
vided shall  be  exacted   as  a  prerequisite  to  any  such  advance. 

Assignment.]  No  assignment  of  this  policy  shall  be  binding  upon  the 
company  until  it  be  filed  with  the  company  at  its  said  home  office.  The  com- 
pany assumes  no  responsibility  as  to  the  validity  of  any  assignment. 

Options  on  Surrender  or  LAPSE.]  After  this  policy  shall  have  been  in 
force  three  full  years  the  owner,  within  one  month  after  any  default  may  elect. 

(a)  To  accept  the  value  of  the  policy  in  cash,  or, 

(b)  To  have  the  insurance  continued  in  force  from  date  of  default  without 


100  INSURANCE  LAWS 

future  participation  and  without  the  right  to  loans,  for  its  face  amount,  in- 
cluding any  outstanding  dividend  additions,  less  any  indebtedness  to  the  com- 
pany hereon,  or, 

(c)  To  purchase  non-participating  paid-up  insurance,  payable  except  as 
hereinafter  provided,  al  the  same  time  and  on  the  same  conditions  as  tins  policy. 
The  cash  value  will  be  the  reserve  at  the  date  of  default  required  to  provide 
for  the  twenty  installments  payable  under  this  policy  and  for  any  dividend 
additions  hereto,  computed  according  to  the  (designate  mortality  table  adopted 
by  the  company  for  computing  reserves)  mortality  table  and  interest  at  the 
rate  of  (designate  rate  of  interest  adopted  by  the  company  for  computing  re- 
serves) per  centum  per  annum,  less  (here  may  be  inserted  not  more  than  two 
and  one  half)  per  centum  of  the  amount  insured  by  this  policy  and  of  any 
dividend  additions  thereto,  and  less  any  existing  indebtedness  to  the  company 
on  this  policy.  Payment  of  such  casli  value  may  be  deferred  by  the  company 
for  not  exceeding  six  mouths  after  the  application  therefor  is  made.  The  term 
for  which  the  insurance  will  be  continued  or  the  amount  of  the  paid-up  policy 
will  be  such  as  the  cash  value  would  purchase  as  a  net  single  premium  at  the 
attained  age  of  the  insured  according  to  the  (designate  the  mortality  table 
adopted  by  the  company  for  computing  reserves)  mortality  table  and  interest 
at  the  rate  of  (designate  the  rate  of  interest  adopted  by  the  company  for 
computing  reserves)  per  centum  per  annum.  If  the  owner  shall  not  within  one 
month  from  default  surrender  this  policy  to  the  company  at  its  home  office  for 
a  cash  surrender  value  or  paid-up  insurance  as  provided  in  options  (a)  and  (c) 
the  insurance  will  be  continued  as  provided  in  option  (b).  The  paid-up  or 
continued  temporary  insurance  will  be  payable  in  twenty  equal  installments  and 
a  payment  of  twenty  installments  under  either  option  shall  discharge  the  com- 
pany from  all  liability  under  this  policy.  The  figures  in  the  following  table 
are  computed  in  accordance  with  the  above  provisions  and  upon  the  assumption 
that  there  is  no  indebtedness  upon  the  policy,  and  that  there  are  no  outstanding 
dividend  additions.  (At  the  option  of  the  company  the  following  may  be  here 
inserted:      "The  figures  apply  to  a  policy  for  $1,000.     As  this  contract  is  for 

$ the  loan,  cash  or  paid-up  insurance,  available  in  any  year  will 

be  $ the  amount  stated  in  the  table  for  that  year.") 

At  Kn<i  Cash  or  Paid-up  Life  Continued  Insurance 

of  Year  Loan  Value  Insurance  Years  Months  Days 

3 * $ 

4 $ $ 

5 $ $ 

<i * * 

7 $ $ 

8 $ $ 

!» * * 

Id $ $ 

11 $ $ 

L2 $ $ 

13 $ $ 

14 $ $ 

15 * $ 

16 $ $ 


STATE  OF  NORTH  DAKOTA  101 

17 $ $ 

18 $ $ 

19 $ $ 

20 $ $ 

(Figures  for  later  years  will  be  furnished  upon  request.) 
Reinstatement.]  In  case  of  continued  temporary  insurance  under  the 
above  provisions  this  policy  upon  evidence  of  insurability  satisfactory  to  the 
company  may  be  reinstated  within  the  first  three  years  of  the  term  for  which  the 
insurance  is  continued  by  payment  of  arrears  of  premium  with  interest  at  (here 
insert  not  greater  than  six)    per  centum  per  annum. 


Agents  are  not  authorized  to  modify  this  policy  or  extend  the  time  for  pay- 
ing the  premium. 

In  witness  whereof  the  company  has  caused  this  policy  to  be  executed  this 
day  of 

NORTH  DAKOTA  STANDARD  LIFE  INSURANCE  POLICY. 
Endowment    Fixed    Survivorship    Annuity. 

Age 

Amount  $ Premium  $ 


of  North  Dakota. 

In  consideration  of dollars,  receipt  of  which  is  hereby 

acknowledged,  and  of  the  payment  of  (here  insert  amounts  and  times  of  pay- 
ments  of  premiums)    until full   year's  premiums   shall   have   been 

paid  or  until  the  prior  death  of  the  insured. 

Promises  to  pay  at  its  home  office  in 

dollars  in  twenty  equal  annual  installments  of 

$ to  the  insured,  the  first  installment  to  be  payable  on 

the day  of 190.  .  .    and 

if  the  insured  shall  die  before  receiving  all  the  twenty  installments  herein  pro- 
vided for,  the  remainder  of  such  twenty  installments  shall  be  payable  as  they 

fall  due  to  (herein  called  the  beneficiary) ,  insert 

"his"  or  "her"  executors,  administrators  or  assigns,  with    (insert 

"out"  if  so  desired)  right  of  revovation,  if  (insert  "he"  or  she")  survives 
the  insured,  otherwise  to  the  executors,  administrators  or  assigns  of  the  in- 
sured. 

Should  the  insured  die  before  (insert  date  of  maturity)  this  policy  shall  be 
I  Livable  to  the  beneficiary  (insert  "his"  or  "her")  executors,  administrators 
or  assigns,  if  (insert  "he"  or  "she")  survives  the  insured,  otherwise  to  the 
executors,  administrators  or  assigns  of  the  insured,  (the  first  installment,  being 
payable  immediately  upon  receipt  of  due  proof  of  the  death  of  the  insured) 

Any  indebtedness  to  the  company  on  this  policy  together  with  the  balance, 
if  any,  of  the  then  current  year's  premium,  will  be  deducted  from  the  amounts 
first  payable  under  this  contract. 


102  INSURANCE  LAWS 

Should  the  insured  or  beneficiary  live  to  receive  the  twenty  installments  pay- 
able as  above  provided,  the  company,  beginning  one  year  after  the  date  when 
the  twentieth  installment  payable  hereunder  shall  fall  due,  will  pay  the  sum  of 

$ annually  to  the  insured,  or,  in  the  event  of  the  death  of  the 

insured,  to  the  beneficiary,  the  said  annual  payment  to  be  due  and  payable  so 
long  as  either  the  insured  or  beneficiary  is  living. 

Change  op  BENEFICIARY.  ]  When  the  right  of  revocation  has  been  reserved, 
or  in  case  of  the  death  of  any  beneficiary  under  either  a  revocable  or  irrevocable 
designation,  the  insured,  subject  to  any  existing  assignment  of  the  policy,  may 
designate  a  new  beneficiary  with  or  without  reserving  right  of  revocation  by 
filing  written  notice  thereof  at  the  home  office  of  the  company,  accompanied 
by  the  policy  for  suitable  indorsement  thereon. 

If  any  beneficiary  shall  die  before  the  insured  and  the  insured  shall  not 
have  designated  a  new  beneficiary  the  interest  of  such  beneficiary  shall  be 
payable  to  the  insured,  (insert  "his"  or  "her")  executors,  administrators  or 
assigns.  If  the  new  beneficiary  shall  be  designated  only  twenty  annual  install- 
ments  will   be   payable   under    this   policy,    and    future    (if    necessary,    insert 

"semi"  or  "quarterly")   annual  premiums  will  be  reduced  to 

dollars  each. 

Payment  of  Premiums.]  The  company  will  accept  payment  of  premiums 
at  other  times  than  as  stated  above,  as  follows: 


Upon  return  of  this  policy  accompanied  by  evidence  satisfactory  to  the  com- 
pany of  the  death  of  the  beneficiary  the  company  will  reduce  the  future  (here 
insert  "annual,"  "semi-annual"  or  "quarterly")  premiums  to  $ each. 

Except  as  herein  provided  the  payment  of  a  premium  or  installment  thereof 
shall  not  maintain  the  policy  in  force  beyond  the  date  when  the  next  premium 
or  installment  thereof  is  payable.  All  the  premiums  are  payable  in  advance  at 
said  home  office  or  to  any  agent  of  the  company  upon  delivery  of  a  receipt 
signed  by  one  or  more  of  the  following  officers  of  the  company  (insert  titles 
of  officers  who  may  sign  receipts)   and  countersigned  by  said  agent. 

A  grace  of  one  month  subject  to  an  interest  charge  at  the  rate  of 

per  centum  per  annum  shall  be  granted  for  the  payment  of  every  premium 
after  the  first,  during  which  month  the  insurance  will  continue  in  force.  If 
the  insured  shall  die  during  the  month  of  grace  the  overdue  premium  will  be 
deducted  from  any  amount  payable  hereon  in  any  settlement  hereunder. 

Conditions.]  (The  policy  may  here  provide  for  restrictions  of  liability  by 
reason  of  travel,  occupation,  change  of  residence  and  suicide.  These  restric- 
tions, except  such  as  refer  to  military  and  naval  service  in  time  of  war,  must 
be  applicable  only  to  cases  where  the  act  of  the  insured  provided  against  occurs 
within  two  years  after  the  issuance  of  the  policy.) 

INCONTESTABILITY.]  This  policy  constitutes  the  entire  contract  between 
tin'  parties  and  shall  be  incontestable  from  its  date,  except  for  non-payment 
of  premiums  and  except  as  otherwise  provided  in  this  policy.  All  statements 
made  by  the  insured  shall  in  the  absence  of  fraud  be  deemed  representations 
and    not  warranties  and   no   such   statement   shall   void   this  policy  unless  it  is 


STATE  OF  NORTH  DAKOTA  103 

contained  in  a  written  application  and  a  copy  of  such  application  shall  be 
indorsed  upon  or  attached  to  this  policy  when  issued. 

If  the  age  of  the  insured  lias  been  understated  or  if  the  age  of  the  bene- 
ficiary has  been  overstated,  the  amount  payable  hereunder  shall  be  such  as  the 
premium  paid  would  have  purchased  at  the  correct  age. 

PARTICIPATION.]  This  policy  shall  participate  in  the  surplus  of  the  com- 
pany and  beginning  not  later  than  the  end  of  the  (insert  first,  second  or  third) 
policy  year  the  company  will  annually  determine  and  account  for  the  portion  of 
the  divisible  surplus  accruing  thereon. 

Dividends.]     Dividends  at  the  option  of  the  owner  of  this  policy  shall  on  the 

day  of of  each  year   (here  may  be  inserted 

"after  the  first  policy  year"  or  ''after  the  second  policy  year")   be  either: 

1.  Paid  in  cash,  or, 

2.  Applied  toward  the  payment  of  any  premium  or  premiums,   or, 

3.  Applied  to  the  purchase  of  paid-up  additions  to  the  policy,  payable  in 
twenty  annual  installments  at  the  same  time  as  the  original  amount  insured 
under  this  policy  is  payable.  The  payment  of  such  twenty  installments  shall 
discharge  the  company  from  all  liability  on  account  of  such  dividend  addi- 
tions, or, 

4.  Left  to  accumulate  to  the  credit  of  the  policy  with  interest  at  (here 
insert  a  rate  not  exceeding  that  used  by  the  company  in  calculating  its  re- 
serves) per  centum  per  annum  and  payable  at  the  maturity  of  the  policy,  but 
withdrawable  on  any  anniversary  of  the  policy. 

Unless  the  owner  of  this  policy  shall  elect  otherwise  within  three  months 
after  the  mailing  by  the  company  of  a  written  notice  requiring  such  election, 
the  dividends  shall  be  paid  in  cash. 

Loans.]  After  three  full  years'  premiums  have  been  paid  the  company  at 
any  time,  while  this  policy  is  in  force,  will  advance  on  proper  assignment  of 
this  policy  and  on  the  sole  security  thereof,  at  a  rate  of  interest  not  greater 

than per  centum  per  annum,  which  interest  if  not  paid  annually  shall 

be  added  to  the  principal  and  bear  the  same  rate  of  interest,  a  sum  equal  to, 
or,  at  the  option  of  the  owner  of  the  policy,  less  than,  the  reserve  at  the  end 
of  the  current  policy  year  required  to  provide  for  the  twenty  installments  pay- 
able under  this  policy  and  for  any  dividend  additions  thereto,  and  no  more, 
computed  according  to  the  (designate  mortality  table  adopted  by  the  company 
for  computing  reserves)  mortality  table,  and  interest  at  the  rate  of  (designate 
rate  of  interest  adopted  by  the  company  for  computing  reserves)  per  centum 
per  annum,  less  (here  may  be  inserted  not  more  than  two  and  one-haTf  per 
centum)  of  the  amount  insured  by  this  policy  and  of  any  dividend  addition 
thereto.  The  company,  however,  will  deduct  from  such  loan  value  any  existing 
indebtedness  to  the  company  on  the  policy  and  any  unpaid  balance  of  the 
premium  for  the  current  policy  year,  and  may  collect  interest  in  advance  on 
the  loan  to  the  end  of  the  current  policy  year.  Such  loan  may  be  deferred  by 
the  company  for  not  exceeding  six  months  after  the  application  therefor  is 
made.  Failure  to  repay  any  such  advance  or  to  pay  interest  shall  not  void  this 
policy  unless  the  total  indebtedness  hereon  to  the  company  shall  equal  or  exceed 
such  loan  value  at  the  time  of  such  failure,  and  until  one  month  after  notice 
shall  have  been  mailed  by  the  company  to  the  last  known  address  of  the  in- 


1()4  INSURANCE  LAWS 

sured,  and  of  th<'  assignee,  if  any.  No  condition  other  than  as  herein  provided 
shall  be  exacted  as  a  prerequisite  to  any  such  advance. 

Assignment.]  No  assignment  of  this  policy  shall  ho  binding  upon  the  com- 
pany until  it  be  filed  with  the  company  at  its  said  home  office.  The  company 
assumes  no  responsibility  as  to  the  validity  of  the  assignment. 

Options  on  Subrendeb  or  Lapse.]     After  this  policy  shall  have  been  in 

force  three  full  years,  the  owner,  within  one  month  after  any  default,  may 
elect : 

(a)  To  accept  the  value  of  this  policy  in  cash,  or, 

(b)  To  have  the  insurance  continued  in  force  from  date  of  default,  with- 
out future  participation  and  without  the  right  of  loans,  for  its  face  amount, 
including  outstanding  dividend  additions,  less  any  indebtedness  to  the  company 
hereon,  or, 

(c)  To  purchase  non-participating  paid-up  insurance,  payable,  except  as 
hereinafter  provided,  at  the  same  time  and  on  the  same  conditions  as  this 
policy.  The  cash  value  will  be  the  reserve  at  the  date  of  default  required  to 
provide  for  the  twenty  installments  payable  under  this  policy  and  for  any 
dividend  additions  thereto,  computed  according  to  the  (designate  mortality 
table  adopted  by  the  company  for  computing  reserves)  mortality  table  and 
interest  at  the  rate  of  (designate  rate  of  interest  adopted  by  the  company  for 
computing  reserves)  per  centum  per  annum,  less  (here  may  be  inserted  not 
more  than  two  and  one-half)  per  centum  of  the  amount  insured  by  this  policy 
and  of  any  dividend  additions  thereto,  and  less  any  existing  indebtedness  to  the 
com] >any  on  this  policy.  Payment  of  such  cash  value  may  be  deferred  by  the 
company  for  not  exceeding  six  months  after  the  application  therefor  is  made. 
The  term  for  which  the  insurance  will  be  continued  or  the  amount  of  the  paid- 
up  policy  will  be  such  as  the  cash  value  will  purchase  as  a  net  single  premium 
at  the  attained  age  of  the  insured  .according  to  the  (designate  the  mortality 
table  adopted  by  the  company  for  computing  reserves)  mortality  table  and  in- 
terest at  the  rate  of  (designate  rate  of  interest  adopted  by  the  company  for 
computing  reserves)  per  centum  per  annum.  If  the  sum  applicable  to  the  pur- 
chase of  temporary  insurance  shall  be  more  than  sufficient  to  continue  the  in- 
surance to  the  end  of  the  endowment  term  named  in  this  policy,  the  excess  shall 
be  used  to  purchase  in  the  same  manner  non-participating,  paid-up  pure  en- 
dowment, payable  at  the  end  of  the  endowment  term  on  the  same  conditions. 

If  the  owner  shall  not  within  one  month  from  default  surrender  this  policy 
to  the  company  at  its  home  office  for  a  cash  surrender  value  or  for  paid-up 
insurance  as  provided  in  options  (a)  and  (c)  the  insurance  will  be  continued 
as  provided  in  option  (b).  The  paid-up  or  continued  temporary  and  pure 
endowment  insurance  will  be  payable  in  twenty  equal  annual  installments  and 
the  payment  of  twenty  installments  under  either  option  shall  discharge  the 
company    from   all    liability   under  this  policy. 

The  figures  in  the  following  table  are  computed  in  accordance  with  the 
above  provisions  and  upon  the  assumption  that  then1  is  no  indebtedness  on  the 
policy,  and   that  there  are  no  outstanding  dividend  additions. 

(At  the  option  of  the  company  the  following  may  be  here  inserted:  ''The 
figures  apply  to  a   policy  of  $1,000.     As  this  contract  is  for  $ the 


STATE  OF  NORTH  DAKOTA  105 

loan,  cash,   paid-up   insurance  or  pure  endowment  available  in   any  year  will 
be the  amount  stated  in  the  table  for  that  year.") 

At  End      Cash  or  Paid-up  Pure 

of  Loan  Endowment  Continued  Insurance  Endow- 

Year  Value  Insurance  Years  Months         •   Days  ments 

3  $ $ $ 

4  $ .  $ $ 

5  $ $ $ 

6  $ •$ $ 

7  $ $ $ 


8  $ $. 

9  $ $. 

10  $ $. 

11  $ $• 

12  * $. 

13  $ $. 

14  $ .$ . 

15  $ $. 


16  $ $ $ 

17  if $ $ 

18  $ $ $ 

19  $ $ $ 

20  $ $ $ 

(Figures  for  later  years  will  be  furnished  upon  request.) 
Reinstatement.]  In  case  of  continued  temporary  insurance  under  the 
above  provisions  this  policy  upon  evidence  of  insurability  satisfactory  to  the 
company  may  be  reinstated  within  the  first  three  years  of  the  term  for  which 
the  insurance  is  continued  by  payment  of  arrears  of  premiums  with  interest 
at   (  here  insert  not  greater  than  six)   per  centum  per  annum. 


Agents  are  not  authorized  to  modify  this  policy  or  extend  time  for  paying 
a  premium. 

In  witness  whereof,  the  company  has  caused  this  policy  to  be  executed  this 
day  of 

NORTH  DAKOTA  STANDARD  LIFE  INSURANCE  POLICY. 

Term. 

Age 

Amount  $ Premium  $ 


of  North   Dakota. 

In  consideration  of dollars,  receipt  of  which  is  hereby 

acknowledged,  and  of  the  payment  <>r'  (here  insert  amounts  ami  times  of  pay- 
ments of  premiums)  until  full  year's  premiums  shall  have  been  paid 

or  until  the   prioi    death   of  the   insured,    promises   to   pay   upon    receipt   at   the 


106  INSURANCE  LAWS 

home  office  of  the  company   in    of  due  proof  of  the  death  of 

of county  of State  of  North 

Dakota,  herein  called  the  insured,  within years  from  the  date  hereof, 

dollars,  less  any   indebtedness  hereon  to  the  company  and  any 

unpaid  portion  of  the  premium  £or  the  then  current  policy  year,  at  said  home 

office,  to beneficiar.  .  .  .with    (insert  "out"  if  so  desired)   right 

of  revocation. 

Change  of  Beneficiary.]  When  the  right  of  revocation  has  been  reserved, 
or  in  case  of  the  death  of  any  beneficiary  under  either  a  revocable  or  irrevocable 
designation,  the  insured,,  subject  to  any  existing  assignment  of  the  policy,  may 
designate  a  new  beneficiary  with  or  without  reserving  the  right  of  revocation  by 
filing  written  notice  thereof  at  the  home  office  of  the  company,  accompanied 
by  the  policy  for  suitable  indorsement  thereon.  If  any  beneficiary  shall  die 
before  the  insured  and  the  insured  shall  not  have  designated  a  new  beneficiary 
the  interest  of  such  beneficiary  shall  be  payable  to  the  insured,  (insert  "his" 
or  'her")   executors,  administrators  or  assigns. 

Payment  of  Premiums.]  The  company  will  accept  payment  of  premiums 
at  other  times  than  as  stated  above,  as  follows: 


,  Except  as  herein  provided  the  payment  of  a  premium  or  installment  thereof 
shall  not  maintain  the  policy  in  force  beyond  the  date  when  the  next  premium 
or  installment  thereof  is  payable. 

All  premiums  are  payable  in  advance  at  said  home  office,  or  to  an  agent  of 
the  company  upon  delivery  of  a  receipt  signed  by  one  or  more  of  the  following 
officers  of  the  company  (insert  titles  of  officers  who  may  sign  receipts)  and 
countersigned  by  said  agent. 

A  grace  of  one  month  subject  to  an  interest  charge  at  the  rate  of 

per  centum  per  annum  shall  be  granted  for  the  payment  of  every  premium 
after  the  first,  during  which  month  the  insurance  shall  continue  in  force.  If 
the  insured  shall  die  during  the  month  of  grace  the  overdue  premium  will  be 
deducted  from  any  amount  payable  hereon  in  any  settlement  hereunder. 

Conditions.]  (The  policy  may  here  provide  for  restrictions  of  liability  by 
reason  of  travel,  occupation,  change  of  residence  and  suicide.  These  restric- 
tions, except  such  as  refer  to  military  and  naval  service  in  time  of  war,  must 
be  applicable  only  to  cases  where  the  act  of  the  insured  provided  against  occurs 
within  two  years  after  issuance  of  the  policy.) 

Incontestability.]  This  policy  constitutes  the  entire  contract  between 
the  parties  and  shall  be  incontestable  from  its  date,  except  for  non-payment 
of  premiums  and  except  as  otherwise  provided  in  this  policy.  All  statements 
made  bv  the  insured  shall  in  the  absence  of  fraud  be  deemed  representations 
and  not  warranties  and  no  such  statement  shall  void  this  policy  unless  it  is 
contained  in  a  written  application  and  a  copy  of  such  application  shall  be 
indorsed  upon   or  attached  to  this  policy   when   issued. 

If  the  age  of  the  insured  has  been  understated  or  if  the  age  of  the  bene- 
ficiary has  been  overstated,  the  amount  payable  hereunder  shall  be  such  as  the 
premium  paid  would  have  purchased  at  the  correct  age. 

Participation.]     This  policy  shall   participate  in  the  surplus  of  the  com- 


STATE  OF  NORTH  DAKOTA  107 

pany  and  beginning  not  later  than  the  end  of  the  (insert  first,  second  or  third) 
policy  year  the  company  will  annually  determine  and  account  for  the  portion  of 
the  divisible  surplus  accruing  thereon. 

Dividends.]     Dividends  at  the  option  of  the  owner  of  this  policy  shall  on  the 

day  of of  each  year   (here  may  be  inserted 

"after  the  first  policy  year"  or  "after  the  second  policy  year")  be  either: 

1.  Paid  in  cash,  or, 

2.  Applied  toward  the  payment  of  any  premium  or  premiums,  or  (the 
policy,  at  the  option  of  the  company,  may  here  provide  for  a  further  option,  as 
follows)  : 

3.  Left  to  accumulate  to  the  credit  of  the  policy  with  interest  at  (here 
insert  a  rate  not  exceeding  that  used  by  the  company  in  calculating  its  re- 
serves) per  centum  per  annum  and  payable  at  the  maturity  of  the  policy,  or  at 
the  expiration  of  the  term,  but  withdrawable  on  any  anniversary  of  the  policy. 

Unless  the  owner  of  this  policy  shall  elect  otherwise  within  three  months 
after  the  mailing  by  the  company  of  a  written  notice  requiring  such  election, 
the  dividends  shall  be  paid  in  cash. 

Assignment.]  No  assignment  of  this  policy  shall  be  binding  upon  the  com- 
pany, until  it  be  filed  with  the  company  at  its  said  home  office.  The  company 
assumes  no  responsibility  as  to  the  validity  of  any  assignment. 

(If  the  term  of  the  policy  is  for  more  than  twenty  years,  the  company  shall 
provide  for  continuance  of  insurance  on  surrender  or  lapse  in  the  following 
form : ) 

Continuance  op  Insurance  on  Lapse.]  In  event  of  default  in  premium 
payments  after  this  policy  shall  have  been  in  force  three  full  years,  the  reserve 
hereon  according  to  the  (designate  mortality  table  adopted  by  the  company  for 
com] aiting  reserves)  mortality  table  and  interest  at  the  rate  of  (designate  rate 
of  interest  adopted  by  the  company  for  computing  reserves)  per  centum  per 
annum,  less  (here  may  be  inserted  not  more  than  two  and  one-half)  per  centum 
of  the  amount  insured  by  this  policy  will  be  applied  to  the  purchase  of  non- 
participating  continued  temporary  insurance  for  the  face  amount  of  this  policy 
at  net  single  premium  rates  at  the  attained  age  of  the  insured  according  to 
the  same  table  of  mortality  and  rate  of  interest. 

TABLE  OF  CONTINUED  INSURANCE. 

At  End  Continued  Insurance 

of  Year  Years  Months  Days 

4  

5  

6  

7  

8  

9  

Id  

11  

12  

13  

14  


108  INSURANCE  LAWS 


15 
16 
17 
lfe 
10 
20 


(Figures  for  later  years  will  be  furnished  on  request.) 
(If  the  term  of  the  policy  is  for  more  than  twenty  years  the  company  shall 
provide  for  reinstatement  in  the  following  form:) 

Reinstatement.]  Upon  evidence  of  insurability  satisfactory  to  the  com- 
pany this  policy  may  be  reinstated  within  the  first  three  years  of  the  term  for 
which  the  insurance  is  continued  by  payment  of  arrears  of  premiums  with 
interest  at   (here  insert  not  greater  than  six)   per  centum  per  annum. 

Options  at  Maturity.]  The  insured,  by  written  notice  to  the  company  at 
its  home  office  and  with  written  consent  of  the  assignee  and  irrevocable  bene- 
ficiary,  if  any.  may  elect  to  have  the  net  sum  payable  under  this  policy  paid 
either  in  cash  or  as  follows: 

1.  By  the  payment  of  interest  thereon  at   per  centum  per  annum, 

pay  aide  annually  to  the  payee  under  this  policy  at  the  end  of  each  year  during 
the  life  of  the  payee  and  by  the  payment  upon  the  death  of  the  payee  of  the 
said  net  sum  and  accrued  interest  to  the  executors,  administrators  or  assign0 
of  the  payee,  unless  otherwise  directed  in  said  notice. 

2.  By  the  payment  of  equal  annual  installments  for  a  specified  number  of 
years,  the  first  installment  being  payable  immediately,  in  accordance  with  the 
following  table  for  each  $1,000  of  said  net  sum. 

3.  By  the  payment  of  equal  annual  payments  payable  at  the  beginning  nf 
each  year  for  a  fixed  period  of  twenty  years  and  for  so  many  years  longer  as 
the  payee  shall  survive,  in  accordance  with  the  following  table  for  each  *  1,000 
of  said  net  sum. 

Installments  payable  under  options  (2)  or  (3)  which  shall  not  have  been 
paid  prior  to  the  death  of  the  payee  shall  be  paid,  unless  otherwise  directed  in 
said  notice,  to  the  executors,  administrators,  or  assigns  of  the  payee. 

If  the  insured  shall  not  have  directed  otherwise  the  beneficiary  may.  after 
the  death  of  the  insured,  by  like  written  notice,  and  with  the  written  conceit 
of  the  assignee,  if  any,  select  either  of  the  above  options. 

Ui  less  otherwise  specified  by  the  insured  the  payee  may  on  any  interest 
date  receive  the  amount  yet  due  under  option  (1),  and  may  at  any  time  receive 
the  commuted  value  of  payments  yet  to  be  made,  computed  upon  the  same  basis 
as  option  (2)  in  the  fo^owing  table,  provided  that  no  such  commutation  will 
be  made  under  (3)  except  after  the  death  of  the  payee  occurring  within  the 
aforesaid  twenty  years. 

TABLE  OF  IXSTA1  I.MFNTS  FOR   FACH  $1,000. 

(Option  2)  (Option  3) 

Number    of  Amount  of  Age   of   Payee  Amount  Of 

Annual  Each  When    Policy  Each 

Installments  Installment  I'.ccomcs    Payable  Installment 

(Blank    lines) 


STATE  OF  NORTH  DAKOTA  ]09 

Agents  are  not  authorized  to  modify  this  policy  or  to  extend  the  time  for 
paying  a  premium. 

In  witness  whereof,  the  company  lias  caused  this  policy  to  be  executed  this 
day  of 

NORTH  DAKOTA  STANDARD  LIFE  INSURANCE  POLICY. 
Term  with  right  to  renew  and  change. 

Age 

Amount  $ »  Premium  $ 


Of   North   Dakota. 

In  consideration  of dollars,  receipt  of  which  is 

hereby  acknowledged,  and  of  the  payment  of   (here  insert  amounts  and  times 

of  payments  of  premiums)   until full  year's   premiums   shall  have 

been  paid  or  until  the  prior  death  of  the  insured. 

Promises  to  pay  upon  receipt  at  the  home  office  of  the  company  in 

of  due  proof  of  the  death  of of ,  County  of 

,  State  of  North  Dakota,  herein  called  the  insured,  within 

years  from  the  date  hereof dollars,  less  any 

indebtedness  hereon  to  the  company  and  any  unpaid  portion   of  the  premium 

for  the  then  current  policy  year  at  said  home  office,  to 

beneficial- with   (insert  ''out''  if  so  desired)   right  of  revocation. 

Change  of  Beneficiary.]  When  the  right  of  revocation  has  been  reserved, 
or  in  case  of  the  death  of  any  beneficiary  under  either  a  revocable  or  irrevo- 
cable designation,  the  insured,  subject  to  any  existing  assignment  of  the  policy, 
may  designate  a  new  beneficiary  with  or  without  reserving  the  right  of  revoca- 
tion by  filing  written  notice  thereof  at  the  home  office  of  the  company,  accom- 
panied by  the  policy  for  suitable  indorsement  thereon.  If  any  beneficiary  shall 
die  before  the  insured  and  the  insured  shall  not  have  designated  a  new  bene- 
ficiary the  interest  of  such  beneficiary  shall  lie  payable  to  the  insured,  (insert 
"his"  or  "her!")    executors,  administrators  or  assigns. 

Payment  of  Premiums.]  The  company  will  accept  payment  of  premiums 
at  other  times  than  as  stated  above,  as  follows: 


Except  as  herein  provided  the  payment  of  ;i  premium  or  installment  thereof 
shall  not  maintain  the  policy  in  force  beyond  the  date  when  the  next  premium 
oi-  installment  thereof  is  payable. 

All  premiums  are  payable  in  advance  at  said  home  office,  or  to  an  agent 
of  the  company  upon  delivery  of  a  receipt  signed  by  one  or  more  of  the  fol- 
lowing officers  of  the  company  (insert  titles  of  officers  who  may  sign  receipts) 
and  countersigned  by  said  agent. 

A  grace  of  one  month  subject  to  an  interest  charge  at  the  rate  of 

per  centum  per  annum  shall  be  granted  for  the  payment  of  every  premium 
after  the  first,  during  which  month  the  insurance  shall  continue  in  force.  If 
the   insured    shall    die   during  the   month   of  grace   the   overdue   premium    will   be 

deducted  from  anv  amount  payable  hereon  in  any  settlement  hereunder. 


HO  INSURANCE  LAWS 

Conditions.]  (The  policy  may  here  provide  Cor  restrictions  of  liability  by 
reason  of  travel,  occupation,  change  of  residence  and  suicide.  These  restric- 
tions, except  such  as  refer  to  military  and  naval  service  in  time  of  war,  must 
he  applicable  only  to  cases  where  the  act  of  the  insured  provided  against  occurs 
within  two  years  after  the  issuance  of  the  policy.) 

Incontestability.]  This  policy  constitutes  the  entire  contract  between  the 
parties  and  shall  lie  incontestable,  from  its  date,  except  for  non-payment  of 
premiums  and  except  as  otherwise  provided  in  this  policy.  All  statements 
made  by  the  insured  shall  in  the  absence  of  fraud  be  deemed  representations 
and  not  warranties  and  no  such  statement  shall  void  this  policy  unless  it  is 
contained  in  a  written  application  and  a  copy  of  such  application  shall  be 
indorsed  upon  or  attached  to  this  policy  when  issued. 

If  the  age  of  the  insured  has  been  understated,  the  amount  payable  here- 
under shall  be  such  as  the  premium  paid  would  have  purchased  at  the  correct 
age. 

Participation.]  This  policy  shall  participate  in  the  surplus  of  the  company 
and  beginning  not  later  than  the  end  of  the  (insert  first,  second  or  third) 
policy  year  the  company  will  annually  determine  and  account  for  the  portion 
of  the  divisible  surplus  accruing  hereon. 

Dividends.]     Dividends  at  the  option  of  the  owner  of  this  policy  shall  on 

the day   of of  each   year    (here   may  be   inserted 

"after  the  first  policy  year"  or  "after  the  second  policy  year")  be  either: 

1.  Paid  in  cash,  or, 

2.  Applied  toward  the  payment  of  any  premium  or  premiums,  (the  policy, 
at  the  option  of  the  company,  may  here  provide  for  a  further  option,  as  fol- 
lows) : 

3.  Left  to  accumulate  to  the  credit  of  the  policy  with  interest  at  (here 
insert  a  rate  not  exceeding  that  used  by  the  company  in  calculating  its  re- 
serves) per  centum  per  annum  and  payable  at  the  maturity  of  the  policy,  or  at 
the  expiration  of  the  term,  but  withdrawable  on  any  anniversary  of  the  policy. 

Unless  the  owner  of  this  policy  shall  elect  otherwise  within  three  months 
after  the  mailing  by  the  company  of  a  written  notice  requiring  such  election, 
the  dividends  shall  be  paid  in  cash. 

Privilege  op  Renewal.]  The  owner  of  this  policy,  if  the  insured  be  not 
over  the  age  of  sixty-five  years,  may  renew  this  policy  for  the  further  terms 

of years  each  by  written  notice  to  the  company  at  its  said  home  office 

accompanied  by  this  policy  for  suitable  indorsement  on  or  before  the  expiration 
of  the  insurance  hereunder  and  by  paying  the  premiums  to  be  fixed  by  the  age 
on  the  birthday  nearest  to  the  date  of  such  renewal  in  accordance  with  the  fol- 
lowing table  for  each  one  thousand  dollars  of  insurance;  if  the  insured  shall 
be  over  the  age  of  sixty-five  years  this  policy  may  upon  similar  notice  be  sur- 
rendered for  an  ordinary  life  policy  which  shall  require  premiums  during  life 
in    accordance   with    the    following    table    for    each    one    thousand    dollars    of 


insurance. 


TABLE  OF  PREMIUMS  FOR  RENEWALS. 


Years    Term    Premium  Ordinary    Life    Premium 

Attained              Payable    in    Advance               Attained  Payable  in  Advance 

Age                        for  Each  $1,000                        Age  for   Each   $1,000 

(Blank  lines) 


STATE  OF  NORTH  DAKOTA  HI 

Privilege  to  Change  to  Other  Fobms  of  Policies.]     The  owner  of  this 

policy  may  at  any  time  within  the  first years  exchange  this  policy 

for  a  participating  policy  Cor  the  same  amount  or  any  less  amount  upon  the 
ordinary  life,  limited  payment  life,  or  endowment  plan  upon  any  anniversary 
of  the  policy,  or  within  the  month  of  grace  by  surrendering  the  policy  to  the 
company  at  said  home  office  with  written  notice  of  the  election  and  by  paying 
the  premiums  to  be  fixed  by  the  age  on  the  birthday  nearest  to  the  date  of  such 
exchange  according  to  the  rates  of  the  company  then  in  force. 

Assignment.  |  No  assignment  of  this  policy  shall  be  binding  upon  the 
compaaiy,  until  it  be  filed  with  the  company  at  its  said  home  office.  The  com- 
pany assumes  no  responsibility  as  to  the  validity  of  any  assignment. 

(If  the  term  of  the  policy  is  for  more  than  twenty  years,  the  company  shall 
provide  for  continuance  of  insurance  on  surrender  or  lapse  in  the  following 
form : ) 

Continuance  op  Insurance  on  Lapse.]  In  event  of  default  in  premium 
payments  after  this  policy  shall  have  been  in  force  three  full  years,  the  reserve 
hereon  according  to  the  (designate  mortality  table  adopted  by  the  company 
for  computing  reserves)  mortality  table  and  interest  at  the  rate  of  (designate 
rate  of  interest  adopted  by  the  company  for  computing  reserves)  per  centum 
per  annum,  less  (here  may  be  inserted  not  more  than  two  and  one-half)  per 
centum  of  the  amount  insured  by  this  policy  will  be  applied  to  the  purchase 
of  non-participating  continued  temporary  insurance  for  the  face  amount  of 
this  policy  at  net  single  premium  rates  at  the  attained  age  of  the  insured  ac- 
cording to  the  same  table  of  mortality  and  rate  of  interest. 

TABLE  OF  CONTINUED  INSURANCE. 

At  End  Continued  Insurance 

of  Year  Years  Months  Days 


4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

IS 

10 

20 


(Figures  for  later  years  will  be  given  upon  request.) 


112  INSURANCE  LAWS 

(If  the  term  of  the  policy  is  for  more  than  twenty  years  the  company  shall 
provide  for  reinstatement  in  the  following  form:) 

Reinstatement.]  Upon  evidence  of  insurability  satisfactory  to  the  com- 
pany this  policy  may  be  reinstated  within  the  first  three  years  of  the  term  for 
which  the  insurance  is  continued  by  payment  of  arrears  of  premiums  with 
interest  at   (here  insert  not  greater  than  six)   per  centum  per  annum. 

Options  at  Maturity.]  The  insured,  by  written  notice  to  the  company  at 
its  home  office  and  with  written  consent  of  the  assignee  and  irrevocable  bene- 
ficiary, if  any,  may  elect  to  have  the  net  sum  payable  under  this  policy  paid 
either  in  cash  or  as  follows: 

1.  By  the  payment  of  interest  thereon  at   per  centum  per  annum, 

payable  annually  to  the  payee  under  this  policy  at  the  end  of  each  year  during 
tlic  life  of  the  payee  and  by  the  payment  upon  the  death  of  the  payee  of  the 
said  net  sum  and  accrued  interest  to  the  executors,  administrators  or  assigns 
of  the  payee,  unless  otherwise  directed  in  said  notice. 

2.  By  the  payment  of  equal  annual  installments  for  a  specified  number  of 
years,  the  first  installment  being  payable  immediately,  in  accordance  with  the 
following  table  for  each  $1,000  of  said  net  sum. 

3.  By  the  payment  of  equal  annual  payments  payable  at  the  beginning  cf 
each  year  for  a  fixed  period  of  twenty  years  and  for  so  many  years  longer  as 
the  payee  shall  survive,  in  accordance  with  the  following  table  for  each  $1 ,000 
of  said  net  sum. 

Installments  payable  under  options  (2)  or  (3)  which  shall  not  have  been 
paid  prior  to  the  death  of  the  payee  shall  be  paid,  unless  otherwise  directed  in 
said  notice,  to  the  executors,  administrators,  or  assigns  of  the  payee. 

If  the  insured  shall  not  have  directed  otherwise  the  beneficiary  may,  after 
the  death  of  the  insured,  by  like  written  notice,  and  with  the  written  consent 
of  the  assignee,  if  any.  select  either  of  the  above  options. 

Unless1  otherwise  specified  by  the  insured  the  payee  ma}'  on  any  interest 
date  receive  the  amount  yet  due  under  option  (1),  and  may  at  any  time  receive 
the  commuted  value  of  payments  yet  to  be  made,  computed  upon  the  same  basis 
as  option  (2)  in  the  following  table;  provided  that  no  such  commutation  will 
be  made  under  (3)  except  after  the  death  of  the  payee  occurring  within  the 
aforesaid  twenty  years. 

TABLE  OF  INSTALLMENTS  FOR  EACH  $1,000. 
(Option  2)  (Option  3) 

Number    of  Amount    of  Age  of  Payee  Amount    of 

Annual  Each  When   Policy  Each 

Installments  Installment  Becomes    Payable  Installment 

(Blank  lines') 

Agents  are  not  authorized  to  modify  this  policy  or  to  extend  the  time  for 
paying  a  premium. 

In  witness  whereof,  the  company  has  caused  this  policy  to  be  executed  this 
day  of (1007,  Oh.  140,  §  2.) 

§  6635a.  Single  Premium  Policies.]  Singh1  premium  policies  may  be 
issued  in  any  form  prescribed  in  section  2,  omitting  therefrom  provisions  or 
portions  thereof  applicable  only  to  other  than  single  premium  policies.  Non- 
participating  policies  may  be  issued  in  any  form  prescribed  in  section  2  if  they 
shall  eontair  a   provision  that  the  policy  shall  be  non-participating,  and  such 


STATE  OF  NORTH  DAKOTA  113 

policies  shall  omit  therefrom   clauses  for  participation    is   the  surplus  of  the 
company.     (1907,  Ch.  140,  $  3.) 

§  6635b.  Term  INSURANCE.]  Policies  issued  on  the  standard  forms  pre- 
scribed in  section  6635  may  provide  for  not  more  than  one  year  preliminary 
term  insurance  by  incorporation  therein  of  the  following  clause  immediately 
preceding  the  "change  of  beneficiary'?  clause:  "The  first  year's  insurance 
under  this  policy  is  term  insurance."  If  the  premium  charged  for  term  insur- 
ance under  a  limited  payment  life  preliminary  term  policy  providing  for  the 
payment  of  all  premiums  thereon  in  less  than  twenty  years  from  the  date  of 
the  policy  or  under  an  endowment  preliminary  term  policy,  exceeds  that  charged 
for  like  insurance  under  twenty  payment  preliminary  term  policies  of  the  same 
company,  the  reserve  thereon  at  the  end  of  any  year,  including  the  first,  shall 
not  be  less  than  the  reserve  on  the  twenty  payment  preliminary  term  policy 
issued  in  the  same  year  and  at  the  same  age  together  with  an  amount  which 
shall  be  equivalent  to  the  accumulation  of  a  net  level  premium  sufficient  to 
provide  for  a  pure  endowment  at  the  end  of  the  premium-payment  period  equal 
to  the  difference  between  the  value  at  the  end  of  such  period  of  such  twenty 
payment  preliminary  term  policy  and  the  full  reserve  at  such  time  of  such  a 
limited  payment  or  endowment  policy.      (1909,  Ch.  149;   1907,  Ch.  140,  §  4.) 

§  6635c.  Provisions  of  Life  Policies.]  No  policy  of  life  insurance  in 
form  other  than  is  provided  in  section  6635  shall  be  issued  in  this  state  or  be 
issued  by  a  life  insurance  company  organized  under  the  laws  of  this  state 
unless  the  same  shall  contain  the  following  provisions: 

1.  A  provision  that  all  premiums  shall  be  payable  in  advance  either  at  the 
home  office  of  the  company,  or  to  an  agent  of  the  company,  upon  delivery  of 
a  receipt  signed  by  one  or  more  of  the  officers  who  shall  be  named  in  the  policy. 

2.  A  provision  for  a  grace  of  one  month  for  the  payment  of  every  premium 
after  the  first,  which  may  be  subject  to  an  interest  charge  during  which  month 
the  Insurance  shall  continue  in  force,  which  provision  may  contain  a  stipulation 
that  if  the  insured  shall  die  during  the  month  of  grace  the  overdue  premium 
will  be  deducted  in  any  settlement  under  the  policy. 

3.  A  provision  that  the  policy  shall  constitute  the  entire  contract  between 
the  parties  and  shall  be  incontestable  after  two  years  from  its  date,  except 
for  non-payment  of  premiums  and  except  for  violation  of  the  conditions  of 
the  policy  relating  to  naval  ami  military  services  in  time  of  war. 

4.  A  provision  that  ail  statements  made  by  the  insured  shall,  in  the  absence 
of  fraud  be  deemed  representations  and  not  warranties  and  that  no  such  state- 
ment shall  void  the  policy  unless  it  is  contained  in  a  written  application  and 
a  copy  of  such  application  shall  be  indorsed  upon  or  attached  to  the  policy  when 
issued. 

5.  A  provision  that  if  the  age  of  the  insured  has  been  understated  the 
amount  payable  under  the  policy  shall  be  such  as  the  premium  would  have 
purchased  at  the  correct  age. 

6.  A  provision  that  the  policy  shall  participate  in  the  surplus  of  the  com- 
pany and  that,  beginning  not  later  than  the  end  of  the  third  policy  year,  the 
company  will  annually  determine  and  account  for  the  portion  of  the  divisible 
surplus  accruing  on  the  policy,  and  that  the  owner  of  the  policy  shall  have  the 
right  each  year  to  have  the  current  dividend  arising  from  such   participation 


114  INSURANCE  LAWS 

paid  in  cash  and  if  the  policy  shall  provide  other  dividend  options  it  shall  fur- 
ther provide  that  if  the  owner  of  the  policy  shall  not  elect  any  such  other 
options  the  dividends  shall  be  paid  in  cash.  This  provision  shall  not  be  re- 
quired  in  non-participating  policies. 

7.  A  provision  that  after  three  full  year's  premiums  have  been  paid  the 
company  at  any  time  while  the  policy  is  in  force  will  advance  on  proper  assign- 
ment of  the  policy  and  on  the  sole  security  thereof,  at  a  specified  rate  of 
interest,  a  sum  equal  to,  or,  at  the  option  of  the  owner  of  the  policy,  less  than, 
the  reserve  at  the  end  of  the  current  policy  year  on  the  policy  and  on  any 
dividend  additions  thereto,  specifying  the  mortality  table  and  the  rate  of  in- 
terest adopted  for  computing  such  reserve,  less  a  sum  not  more  than  two  and 
one-half  per  centum  of  the  amount  insured  by  the  policy  and  of  any  dividend 
additions  thereto;  and  that  the  company  will  deduct  from  such  loan  value  any 
existing  indebtedness  on  the  policy  and  any  unpaid  balance  of  the  premium  for 

.the  current  policy  year,  and  may  collect  interest  in  advance  on  the  loan  to  the 
end  of  the  current  policy  year;  which  provision  may  further  provide  that  such 
loan  may  be  deferred  for  not  exceeding  six  months  after  the  application  there- 
for is  made.  It  shall  be  further  stipulated  in  the  policy  that  failure  to  repay 
any  such  advance  or  to  pay  interest  shall  not  void  the  policy  unless  the  total 
indebtedness  thereon  to  the  company  shall  equal  or  exceed  such  loan  value  at 
the  time  of  such  failure  nor  until  one  month  after  notice  shall  have  been  mailed 
by  the  company  to  the  last  known  address  of  the  insured  and  of  the  assignee, 
if  any.  No  condition  other  than  as  herein  provided  shall  be  exacted  as  a 
prerequisite  to  any  such  advance.  This  provision  shall  not  be  required  in  term 
insurances. 

8.  A  provision  which,  in  event  of  default  in  premium  payments,  after 
premium  shall  have  been  paid  for  three  years,  shall  secure  to  the  owner  of  the 
policy  a  stipulated  form  of  insurance,  the  net  value  of  which  shall  be  at  least 
equal  to  the  reserve  at  the  date  of  default  on  the  policy  and  on  any  dividend 
additions  thereto,  specifying  the  mortality  table  and  rate  of  interest  adopted 
for  computing  such  reserves,  less  a  sum  of  not  more  than  two  and  one-half  per 
centum  of  the  amount  insured  by  the  policy  and  of  any  existing  dividend 
additions  thereto,  and  less  any  existing  indebtedness  to  the  company  on  the 
policy.  Such  provision  shall  stipulate  that  the  policy  may  be  surrendered  to 
the  company  at  its  home  office  within  one  month  from  the  date  of  default  for 
a  specified  cash  value  at  least  equal  to  the  sum  which  would  otherwise  be  avail- 
able for  the  purchase  of  insurance  as  aforesaid  and  may  stipulate  that  the 
company  may  defer  payment  for  not  more  than  six  months  after  the  application 
therefor  is  made.  This  provision  shall  not  be  required  in  term  insurance  of 
twenty  years  or  less. 

9.  A  table  showing  in  figures  the  loan  values,  and  the  options  available 
under  the  policies  each  year  upon  default  in  premium  payments  during  at  least 
the  first  twenty  years  of  the  policy,  beginning  with  the  year  in  which  such 
values  and  options  become  available. 

10.  A 'provision  that  if,  in  event  of  default  in  premium  payments,  the  value 
of  the  policy  shall  be  applied  to  the  purchase  of  other  insurance,  and  if  such 
insurance  shall  be  in  force  and  the  original  policy  shall  not  have  Keen  sur- 
rendered to  the  company   ami    cancelled,   the  policy   may  be   reinstated   within 


STATE  OF  NORTH  DAKOTA  115 

three  years   from  such   default,   upon   evidence  of  insurability   satisfactory   to 
the  company  and  payment  of  arrears  of  premiums  with  interest. 

11.  A  provision  that  when  a  policy  shall  become  a  claim  by  the  death  of 
the  insured  settlement  shall  be  made  upon  receipt  of  due  proof  of  death,  or 
not  later  than  two  months  after  receipt  of  such  proof. 

12.  A  table  showing  the  amounts  of  installments  in  which  the  policy  may 
provide  its  proceeds  may  be  payable. 

13.  A  title  on  the  face  and  on  the  back  of  the  policy  correctly  describing 
the  same. 

Any  of  the  foregoing  provisions  or  portions  thereof  relating  to  premiums 
not  applicable  to  single  [premium]  policies,  shall  to  that  extent  not  be  in- 
corporated therein.     (1907,  Ch.  140,  §  5.) 

§  6635d.  Provisions  Prohibited.]  No  policy  of  life  insurance  in  form 
other  than  is  prescribed  in  section  6635  shall  be  issued  or  delivered  in  this  stal>' 
or  be  issued  by  a  life  insurance  company  organized  under  the  laws  of  this  state, 
if  it  contain  any  of  the  following  provisions: 

1.  A  provision  for  forfeiture  of  the  policy  for  failure  to  repay  any  loan 
on  the  policy  or  to  pay  interest  on  such  loan  while  the  total  indebtedness  on  the 
policy  is  less  than  the  loan  value  thereof;  or  any  provision  for  forfeiture  for 
failure  to  repay  any  such  loan  or  to  pay  interest  thereon,  unless  such  provision 
contain  a  stipulation  that  no  such  forfeiture  shall  occur  until  at  least  one 
month  after  notice  shall  have  been  mailed  by  the  company  to  the  last  known 
address  of  the  insured  and  of  the  assignee,  if  any. 

2.  A  provision  limiting  the  time  within  which  any  action  at  law  or  in 
equity  may  be  commenced  to  less  than  five  years  after  the  cause  of  action  shall 
accrue. 

3.  A  provision  by  which  the  policy  shall  purport  to  be  issued  or  to  take 
effect  before  the  original  application  for  the  insurance  was  made,  if  thereby 
the  assured  would  rate  at  an  age  younger  than  his  age  at  date  when  the  appli- 
cation was  made,  according  to  his  age  at  nearest  birthday. 

4.  A  provision  for  any  mode  of  settlement  at  maturity  of  less  value  than 
the  amount  insured  on  the  face  of  the  policy  plus  dividend  additions,  if  any, 
less  any  indebtedness  to  the  company  on  the  policy  and  less  any  premiums  that 
may  by  the  terms  of  the  policy  be  deducted.     (1907,  Ch.  140,  §  6.) 

§  6635e.  Preliminary  Term  Policies.]  Preliminary  term  policies  not 
issued  on  the  standard  forms  shall  also  be  subject  to  the  provisions  of  section 
6635b.     (1907,  Ch.  140,  §  7.) 

§  6635f.  Form  Filed  With  Insurance  Commissioner.]  No  policy  of  life 
insurance  shall  be  issued  or  delivered  in  this  state,  or  be  issued  by  a  life  insur- 
ance company  organized  under  the  laws  of  this  state,  until  the  form  of  the  same 
has  been  filed  with  the  insurance  commissioner;  and  after  the  insurance  com- 
missioner shall  have  notified  any  company  of  his  disapproval  of  any  form  it 
shall  be  unlawful  for  such  company  to  issue  any  policy  in  the  form  so  dis- 
approved. The  commissioner's  action  shall  be  subject  to  review  by  any  court 
of  competent  jurisdiction.     (1907,  Ch.  140,  §  8.) 

§  6635g.  Provisions  Restricted.]  The  policies  of  a  life  insurance  com- 
pany, not  organized  under  the  laws  of  this  state,  may  contain  any  provision 
which  the  law  of  this  state,  territory,  district  or  county  under  which  the  com- 


116  INSURANCE  LAWS 

panj  is  organized;  prescribes  shall  be  in  such  policies  when  issued  in  this  state, 
and  the  policies  ol*  a  life  insurance  company  organized  under  the  laws  of  this 
state  may,  when  issued  or  delivered  in  any  other  state,  territory,  district  or 
county,  contain  any  provision  required  by  the  laws  of  the  state,  territory, 
district  or  county  in  which  the  same  are  issued,  anything  in  this  act  to  the  con- 
trary notwithstanding.     (1907,  Oh.  140,  §  9.) 

§  6635h.  What  Companies  Exempt.]  This  act  (sections  6634-6635i) 
shall  not  apply  to  annuities,  industrial  policies  or  to  corporations  or  associa- 
tions operating  on  the  assessment  or  fraternal  plan.     (1907,  Ch.  140,  $  10.) 

§  6635i.  "Company"  Defined.]  Wherever  the  word  "company"  is  used 
in  this  act  (sections  6634-6635i)  it  shall  be  held  to  include  corporations  and 
associations.     (1907,  Ch.  140,  §  11.) 

§  6636.  Policy  Must  Contain  Entire  Contract.]  Every  policy  of  life 
insurance  issued  or  delivered  within  this  state  on  or  after  the  first  day  of 
January,  nineteen  hundred  and  eight,  by  any  life  insurance  corporation  doing 
business  within  the  state  shall  contain  the  entire  contract  between  the  parties. 
(1907,  Ch.   155.) 


CHAPTER  82. 

Policies  op  Health  or  Accident  Insurance. 

§  6637.  Typography  of  Policy,  and  Provisions  Required.]  No  policy 
of  insurance  against  loss  or  damage  by  the  sickness,  bodily  injury  or  death  by 
accident  of  the  assured  shall  be  issued  or  delivered  in  this  state  unless  the  same 
shall  be  plainly  printed,  no  portion  thereof  in  smaller  than  long  primer  type, 
and  every  policy  so  issued  and  delivered  shall  contain  the  following  provisions: 

1.  A  provision  that  notice  of  accident  or  disability  shall  be  given  within 
forty  (40)  days,  unless  such  notice  may  be  shown  not  to  have  been  reasonably 
possible,  to  some  certain  office  or  officer  designated  therein. 

2.  A  provision  that  the  policy  or  certificate  contains  the  entire  contract. 

.'!.  A  provision  that  if  a  past-due  premium  is  accepted  after  lapse,  such 
acceptance  shall  reinstate  the  policy  in  full. 

4.  A  provision  that  if  the  occupation  of  the  insured  be  changed  to  a  more 
hazardous  one,  then  the  benefit  and  payment  to  be  such  as  the  premium  would 
pay  for  in  that  occupation. 

5.  All  benefits  called  for  by  the  policy  shall  be  specifically  stated  in  full 
therein,  and  all  exceptions  shall  be  stated  specifically  and  with  the  same 
prominence  as  the  benefits.     (1911,  Ch.  158,  §  1.) 

§  6638.  Provisions  Forbidden.]  No  policy  of  insurance  against  loss  or 
damage  by  the  sickness,  bodily  injury,  or  death  by  accident  of  the  assured  shall 
be  issued  or  delivered  in  this  state  if  it  contain  any  of  the  following  provisions: 

1.  A  provision  limiting  the  time  in  which  an  action  at  law  or  in  equity  may 
be  commenced  to  less  than  two  years  after  date  upon  which  final  proof  of  loss 
or  disability  shall  have  been  filed  with  the  company. 

2.  A  provision  referring  to  the  constitution,  by-laws  or  rules  of  the  com- 
pany or  association  or  attempting  In  make  the' same  a  part  of  the  policy. 

:;.  A  provision  Cor  the  deduction  of  advance  premiums  or  assessments  from 
benefits  payable  under  the  terms  of  the  policy. 


STATE  OF  NORTH  DAKOTA  117 

4.  A  provision  limiting  the  amount  of  indemnity  to  be  paid  to  a  sum 
less  than  the  indemnity  as  stated  in  the  policy  and  for  which  the  premium  has 
been  paid.     (1911,  Ch.  158,  §  2.) 

§  6639.  Application  of  This  Chapter.]  This  act  shall  apply  to  all" 
companies,  corporations,  or  associations  issuing  a  policy  of  insurance  against 
loss  or  damage  caused  by  the  sickness,  bodily  injury,  or  death  by  accident  of 
the  assured,  except  fraternal  beneficiary  associations.      (1911,  Ch.  158,  §  3.) 

§  6640.  Fokiu  OF  Policy  TO  BE  FILED  With  INSURANCE  COMMISSIONER  FOR 
Approval.]  No  policy  of  insurance  against  loss  or  damage  by  the  sickness, 
bodily  injury,  or  death  by  accident  of  the  assured  shall  be  issued  or  delivered 
in  this  state  by  any  company,  corporation,  or  association  until  the  form  of  the 
same  together  with  a  table  of  rates  and  classification  of  risks  has  been  filed 
with  the  commissioner  of  insurance;  and  after  the  commissioner  of  insurance 
shall  have  notified  any  company,  corporation,  or  association  of  his  disapproval 
of  any  form,  stating  his  reasons  therefor  in  writing,  it  shall  be  unlawful  for 
such  company,  corporation,  or  association  to  issue  any  policy  in  the  form  so 
disapproved.  The  commissioner's  action  shall  be  subject  to  review  by  any 
court  of  competent  jurisdiction.     (1911,  Ch.  158,  §  4.) 


CHAPTER  83. 

Indemnity. 


§  6641.  Defined.]  Indemnity  is  a  contract  by  which  one  engages  to  save 
another  from  a  legal  consequence  of  the  conduct  of  one  of  the  parties  or  of 
some  other  person.     (R.  C.  1905,  §  6065.) 

Contracts  of  indemnity  within  the  statute  of  frauds.     42  Am.  St.  Rep. 
3  86. 

As  to  similar  provision  in  Cal.  Civ.  Code,  section  2772.     See  Graves  v. 
Moore,  58  Cal.  435;  Magee  v.  McManus,  70  Cal.  553,  12  Pac.  451. 

§  6642.  Against  UNLAWFUL  Act  Void.]  An  agreement  to  indemnify  a 
person  against  an  act  thereafter  to  he  done  is  void,  if  the  act  is  known  by  such 
person  at  the  time  of  doing  it  to  be  unlawful.     (R.  C.  1905,  §  6066.) 

Validity  of  agreement  to  indemnify  hail  in  a  criminal  case.     4  L.  R.  A. 
78;  20  L.  R.  A.   (N.  S.)  58. 

Agreements  to  indemnify  against  illegal  acts.     40  Am.  Dec.  425. 

§  6643.  Against  Act  Done  Valid,  Unless  Felony.]  An  agreement  to 
indemnify  a  person  against  an  act  already  done  is  valid,  even  though  the  act 
was  known  to  be  wrongful,  unless  it  was  a  felony.      (R.  C.  1905,  §  6067.) 

§  6644.  Against  Act  of  Person  Includes  A.gents.]  An  agreement  to 
indemnify  against  the  acts  of  a  certain  person,  applies  not  only  to  his  acts  and 
their  consequences,  but  also  to  those  of  his  agents.     (R.  C.  1905,  §  6068.) 

§  (i(i4.").  SEVERAL  INCLUDES  Each.]  An  agreement  to  indemnify  several 
persons  applies  to  each  unless  a  contrary  intention  appears.  (R.  C.  1905, 
§  6069.) 

§  6646.    When  Liable  Jointly    With    Person   Indemnified.]     One  who 

indemnifies  another   person    against   an   act   to   be   clone  by   the   latter,    is   liable 


118  INSURANCE  LAWS 

jointly  with  the  person  indemnified  and  separately  to  every  person  injured  by 
such  act.     (R.  C.  1905,  $  6070.) 

§  6647.  Rules  to  be  Applied  in  Interpretation.]  In  the  interpretation 
of  a  contract  of  indemnity  the  following  rules  are  to  be  applied,  unless  a  con- 
trary intention  appears: 

1.  Upon  an  indemnity  against  liability,  expressly  or  in  other  equivalent 
terms,  the  person  indemnified  is  entitled  to  recover  upon  becoming  liable. 

2.  Upon  an  indemnity  against  claims  or  demands,  or  damages  or  costs, 
expressly  or  in  other  equivalent  terms,  the  person  indemnified  is  not  entitled 
to  recover  without  payment  thereof. 

3.  An  indemnity  against  claims  or  demands,  or  liability,  expressly  or  in 
other  equivalent  terms,  embraces  the  costs  of  defense  against  such  claims, 
demands  or  liability  incurred  in  good  faith  and  in  the  exercise  of  reasonable 
discretion. 

4.  The  person  indemnifying  is  bound  on  request  of  the  person  indemnified 
to  defend  actions  or  proceedings  brought  against  the  latter  in  respect  to  the 
matters  embraced  by  the  indemnity;  but  the  person  indemnified  has  the  right 
to  conduct  such  defense,  if  he  chooses  to  do  so. 

5.  If  after  request  the  person  indemnifying  neglects  to  defend  the  person 
indemnified,  a  recovery  against  the  latter  suffered  by  him  in  good  faith  is 
conclusive  in  his  favor  against  the  former. 

6.  If  the  person  indemnifying,  whether  he  is  a  principal  or  a  surety  in  the 
agreement,  has  not  reasonable  notice  of  the  action  or  proceedings  against  the 
person  indemnified,  or  is  not  allowed  to  control  its  defense,  judgment  against 
the  latter  is  only  presumptive  evidence  against  the  former. 

7.  A  stipulation,  that  a  judgment  against  the  person  indemnified  shall  be 
conclusive  upon  the  person  indemnifying,  is  inapplicable  if  he  had  a  good 
defense  upon  the  merits  which  by  want  of  ordinary  care  he  failed  to  establish 
in  the  action.     (R.  C.  1905,  $  6071.) 

One  suing  on  contract  of  indemnity  must  show  he  was  injured  or  became 
liable  to  another  for  damages  growing  out  of  the  transaction  indemnified 
against.     Cramer  v.  Building  &  Loan  Ass'n,  6  S.  D.  341,  61  N.  W.  35. 

Indemnification  of  bail  in  criminal  action  is  governed  by  these  sections. 
Western  Surety  Co.  v.  Kelley,  27  S.  D.  465,  131  N.  W.  808. 

$  6648.  Engagement  to  Answer  for  Violation  of  Duty.  Reimburse- 
ment.] When  one  at  the  request  of  another  engages  to  answer  in  damages, 
whether  liquidated  or  unliquidated,  for  any  violation  of  duty  on  the  part  of  the 
latter,  he  is  entitled  to  be  reimbursed  in  the  same  manner  as  a  surety  for  what- 
ever he  may  pay.     (R.  C.  1905,  §  6072.) 

§  6649.  When  Sureties  Called  Bail.]  Upon  those  contracts  of  indemnity 
which  are  taken  in  legal  proceedings  as  security  for  the  performance  of  an 
obligation  imposed  or  declared  by  the  tribunals  and  known  as  undertakings  or 
recognizances,  the  sureties  are  called  bail.      (R,  C.  1905,  §   6073.) 

As  verb  word  "bail"  means  to  deliver  arrested  person  to  sureties  upon 

their  giving  security  for  his  appearance  in  court.     State  v.  Western  Surety 

Co.,  126  S.  D.  170,  128  N.  W.  173. 

Presumption  that  obligation  is  joint  and  not  several  which  arises  under 

section   111S  docs  not   depend   on  particular  obligation   imposed   on   persons 


STATE  OF  NORTH  DAKOTA  119 

therein  named   as  bail.     State  v.   Western   Surety   Co.,   26   S.   D.   170,    128 
N.  W.  173. 

§  6650.     Obligations  op  Bail,  How  Governed.]     The  obligations  of  bail 
are  governed  by  the  statutes  specially  applicable  thereto.     (R.  C.  1905,  §  6074.) 


PENAL  CODE. 


CHAPTER  45. 

Lotteries. 


§  9669.  Insuring  Lottery  Tickets.]  Every  person  who  insures  or  re- 
ceives any  iisideration  for  insuring  for  or  against  the  drawing  of  any  ticket, 
share  or  interest  in  any  lottery  or  for  or  against  the  drawing  of  any  num- 
ber, or  ticket  or  number  of  any  ticket  in  any  lottery;  and  every  person 
who  receives  any  valuable  consideration  upon  any  agreement  to  pay  any  sum, 
or  to  deliver  any  property  or  thing  in  action  in  the  event  that  any  ticket, 
share  or  interest  in  any  lottery,  or  any  number  or  ticket  or  number  of  any 
ticket  in  any  lottery  shall  prove  fortunate  or  unfortunate,  or  shall  be  drawn 
or  not  drawn  on  any  particular  day  or  in  any  particular  order;  and  every  per- 
son who  promises,  agrees  or  offers  to  pay  any  sum  of  money  or  to  deliver  any 
property  or  thing  in  action,  or  to  do  or  forbear  to  do  anything  for  the  benefit 
of  any  other  person,  with  or  without  consideration,  upon  any  event  whatever 
connected  with  any  lottery,  is  guilty  of  a  misdemeanor.     (R.  C.  1905,  §  8963.) 

§  9670.  Advertising  Same.]  Every  person  who,  by  writing  or  printing, 
by  circulars  or  letters  or  in  any  other  way,  advertises  or  publishes  any  offer, 
notice  or  proposal  for  any  violation  of  the  last  section,  is  guilty  of  a  mis- 
demeanor.    (R,  C.  1905,  §  8964.) 


CHAPTER  58. 
Arson. 


§  9499.  Arson.  Nighttime.  Destroying  Life.]  Every  person  who 
willfully  and  maliciously  burns,  in  the  nighttime,  the  dwelling  house  of  another 
or  of  which  he  is  a  lessee  or  tenant,  whereby  the  life  of  any  person  is  destroyed, 
or  who.  in  the  night  time,  willfully  and  maliciously  sets  fire  to  any  other  build- 
ing, owned  by  himself  or  another,  by  the  burning  whereof  such  dwelling  house 
shall  be  burnt  in  the  night  time,  whereby  the  life  of  any  person  is  destroyed, 
shall  be  deemed  guilty  of  murder  in  the  second  degree.     (R.  C.  1905.  §  8826.) 

As  to  similar  provision  in  Gal.  Pen.  Code,  sections  447-449.     See  People 

v.  Giacamella,  71    Gal.   48,    11'    Pae.  302;    People  V.  Russell.   81    <"'al.   616,  23 

Pac.   418;    Clugston   v.   Garretson,    103   Cal.   441,   37   Pac.   469;    People   v. 

Mooney,   127  Cal.  339,  59  Pac.   761. 


120  INSURANCE  LAWS 

§  9849.  Arson  Defined.]  Arson  is  the  willful  and  malicious  burning  of 
a  building  with  intent  to  destroy  it.     (R.  C.  1905,  §  9123.) 

Information  charging  facts  constituting  arson  in  third  degree  as  denned 
by  statute  is  sufficient.  State  v.  Young,  9  N.  D.  165,  82  N.  W.  420;  State 
v.  McDonald,  16  S.  D.  78,  !M  N.  W.   117. 

Crime  of  arson  and  who  may  commit.     1(|1  Am.  St.  Rep.  21. 
What  constitutes  arson.     81   Am.  Dec.  65. 
Prisoner  burning  prison  to  escape.     21  Am.  Rep.  257. 
§  9850.     BUILDING  Defined.]     Any  house,  edifice,  structure,  vessel  or  other 
erection,  capable  of  affording  shelter  for  human  beings,  or  appurtenant  to  or 
connected  With  an  erection  so  adapted,  is  a  "building"  within  the  meaning  of 
the  last  section.      (R.  C.  1905,  §  9124.) 

Freight  car  as  buildings.     State  v.  Lintner,  19  S.  D.  447,  104  N.  W.  205. 
What  is  a  house  within  the  meaning  of  the  law  of  arson.     22  Am.  Dec. 
144;    71   Am.   St.  Rep.   266. 

§  9851.  Inhabitable  Building  Defined.]  Any  building  is  deemed  an 
"inhabitable  building,"  within  the  meaning  of  this  chapter,  any  part  of  which 
has  usually  been  occupied  by  any  person  lodging  therein  at  night.  (R.  C.  1905, 
§    9125.) 

As  to  similar  provision  in  Cal.  Pen.  Code,  section  449.  See  People  v. 
Russell,  81  Cal.  616,  23  Pac.  418. 

§  9852.  Nighttime  Defined.]  The  word  "nighttime,"  in  this  chapter 
includes  the  period  between  sunset  and  sunrise.     (R.  C.  1905,  §  9126.) 

§  9853.  Burning  Defined.]  To  constitute  a  burning  within  the  meaning 
of  section  9849  it  is  not  necessary  that  the  building  set  on  fire  should  be  de- 
stroyed. It  is  sufficient  that  the  fire  is  applied  so  as  to  take  effect  upon  the 
substance  of  the  building.      (R.  C.  1905,  §  9127.) 

§  9854.  Ownership  Defined.]  To  constitute  arson  it  is  not  necessary 
that  another  person  than  the  accused  should  have  had  ownership  in  the  building 
set  on  fire.  It  is  sufficient  that  at  the  time  of  the  burning  another  person  was 
rightfully  in  the  possession  of,  or  was  actually  occupying,  such  building  or  any 
part  thereof.     (R,  C.  1905,  §  9128.) 

Arson  is  setting  fire  to  one's  building.     32  L.  R.  A.  647. 

Arson   by    one    spouse    burning    property    of    the   other.      21    L.    R.    A. 

(N.   S.)    27.' 

§  9855.  Immaterial  Variance  in  Proof.]  An  omission  to  designate,  or 
error  in  designating  in  an  information  or  indictment  for  arson,  the  owner  or 
occupant  of  a  building,  shall  not  prejudice  the  proceedings  thereupon,  if  it 
appears  that  upon  the  whole  description  given  of  the  building,  it  is  sufficiently 
identified  to  enable  the  accused  to  prepare  his  defense.      (R.  C.  1905,  §  9129.) 

§  9856.  Malice,  When  Inferred.]  Malice  sufficient  to  constitute  arson 
is  inferred  from  proof  that  the  accused  committed  an  act  of  burning  a  building, 
and  that  some  other  person  was  rightfully  in  possession  of  or  actually  occupy- 
ing any  pari  thereof.  It  is  nol  necessary  that  the  accused  should  have  had 
actual  knowledge  of  such  possession  or  occupancy  or  should  have  intended  to 
injure  any  person.     (R.  C.  1905,  §  9130.) 

§  9857.    Burning  Without  [ntent  to  Destroy.]     The  burning  of  a  build- 


STATE  OF  NORTH  DAKOTA  121 

ing  under  circumstances  which  show  beyond  :i  reasonable  doubt  that  there  was 

no  intent  to  destroy  it,  is  not  arson.     (K.  0.  1905,  §  9131.) 

§  9858.  Contiguous  Buildings.]  When  any  appurtenance  to  any  building 
is  so  situated  with  reference  to  such  building,  or  when  any  building  is  so  situ- 
ated with  reference  to  another  building  that  the  burning  of  one  will  manifestly 
endanger  the  other,  a  burning  of  the  one  is  deemed  a  burning  of  the  other, 
within  the  foregoing  definition  of  arson,  and  as  against  any  person  actually 
participating  in  the  original  setting  fire,  as  of  the  moment  when  the  fire  from 
the  one  shall  communicate  to  and  burn  the  other.     (R.  C.  1905,  §  9132.) 

§  9859.  Degrees  OF  ARSON.]  Arson  is  distinguished  into  four  degrees. 
(R.  C.  1905,  $  9133.) 

Verdict   of  "guilty   as  charged"   is   sufficient   on    information   charging 

certain  degree  of  arson.     State  v.  McDonald,  16  S.  D.  78,  91  N.  W.  447. 

§  9860.  Ix  the  First  Degree.]  Maliciously  burning  in  the  nighttime  an 
inhabited  building,  in  which  there  is  at  the  time  some  human  being,  is  arson 
in  the  first  degree.     (K.  C.  1905,  §  9134.) 

As  to  similar  provision  in  Cal.  Pen.  Code,  section  454.     See  People  v. 

Fisher,  51  Cal.  319. 

§  9861.  Exception.  Appurtenance  to  Building.]  No  warehouse,  barn, 
shed,  or  other  outhouse,  is  a  subject  of  arson  in  the  first  degree,  unless  it  is 
immediately  connected  with,  and  forms  part  of  an  inhabited  building.  (R.  C. 
1905,  §  9135.) 

§  9862.  Arson  in  Second  Degree.]  Maliciously  burning  in  the  daytime 
an  inhabited  building,  in  winch  there  is  at  the  time  some  human  being,  is  arson 
in  the  second  degree.     (R.  C.  1905,  §  9136.) 

§  9863.  When  Burning  in  Nighttime  is.]  Maliciously  burning  in  the 
nighttime  a  building,  not  an  inhabited  building,  but  adjoining  to  or  within 
curtilage  of  an  inhabited  building  in  which  there  is  at  the  time  some  human 
being,  so  that  such  inhabited  building  is  endangered,  even  though  it  is  not  in 
fact  injured  by  such  burning,  is  arson  in  the  second  degree.  (R.  C.  1905, 
$  9137.) 

§  9864.  Arson  in  Third  DEGREE.]  Maliciously  burning  in  the  daytime  a 
building  the  burning  of  which  in  the  nighttime  would  be,  arson  in  the  second 
degree,  is  arson  in  the  third  degree,     i  I,'.  < '.  1905,  §  9138.) 

Sufficient   pleading  of  arson    in   the  third   degree.      State  v.   Young,   9   N. 

D.  165,  S2  N.  W.  420;  State  v.  McDonald,  10  S.  D.  78,  91  N.  W.  447. 

§  9865.    When  Burning  ix  Nighttime  is.]     Maliciously  burning  in  the 

nighttime  any  building,  not  the  subject  of  arson  in  the  first  or  second  degree, 
including  any  house  for  public  worship,  school  house  or  public  building  belong- 
ing to  the  state,  or  to  any  county,  city,  town  or  village,  any  building  in  which 
have  usually  been  deposited  the  papers  of  any  public  officer,  and  any  barn,  mill 
or  manufactory,  is  arson   in  the  third  degree.      (R.  < '.   1905,  $   9139:) 

§  9S66.  ARSON  ix  FOURTH  DEGREE.]  Maliciously  burning  in  the  daytime 
any  building  the  burning  of  which  in  the  nighttime  would  be  arson  in  the  third 
degree,  is  arson  in  the  fourth  degree.      (R.  C.  1905,  §  9140.) 

§  9867.  Punishment  fob  Arson.]  Arson  is  punishable  by  imprisonment 
in  the  penitentiary  as  follows: 

1.     Arson  in  the  first  degree,  for  any  term  not  less  than  ten  years. 


122  INSURANCE  LAWS 

2.  Arson  in  the  second  degree,  not  exceeding  ten  years  and  not  less  than 
seven  years. 

3.  Arson  in  the  third  degree,  not  exceeding  seven  years  and  not  less  than 
four  years. 

4.  Arson  in  the  fourth  degree,  not  exceeding  four  years  and  not  less  than 
one  year,  or  by  imprisonment  in  a  county  jail  not  exceeding  one  year.  (R.  C. 
1905,  §  9141.) 

Cruel  and  unusual  punishment  for  arson.     35  L.  R.  A.  569. 


CHAPTER  69. 

Fraudulently  Fitting  Out  and  Destroying  Vessels. 

§  9977.  Officer  Willfully  Destroying  Vessel.]  Every  captain  or  other 
officer  or  person  in  command  or  charge  of  any  vessel,  who,  within  this  state, 
willfully  wrecks,  sinks,  or  otherwise  injures  or  destroys  such  vessel,  or  any  cargo 
in  such  vessel,  or  willfully  permits  the  same  to  be  wrecked,  sunk  or  otherwise 
injured  or  destroyed,  with  intent  to  prejudice  or  defraud  an  insurer  or  any  other 
person,  is  punishable  by  imprisonment  in  the  penitentiary  for  life.  (R.  C. 
1905,  §  9251.) 

§  9978.  Others,  Same. J  Every  person  other  than  such  as  are  embraced 
within  the  last  section,  who  is  guilty  of  an  act  therein  prohibited,  is  punishable 
by  imprisonment  in  the  penitentiary  not  exceeding  ten  years  and  not  less  than 
three.     (R.  C.  1905,  §  9252.) 

§  9979.  Fitting  Out  Vessel  With  Intent  to  Wreck.]  Every  person 
guilty  of  fitting  out  any  vessel,  or  lading  any  cargo  on  board  of  any  vessel,  with 
intent  to  cause  or  permit  the  same  to  be  wrecked,  sunk  or  otherwise  injured  or 
destroyed,  and  thereby  to  prejudice  or  defraud  an  insurer  or  any  other  person, 
is  punishable  by  imprisonment  in  the  penitentiary  not  exceeding  ten  years  and 
not  less  than  three.     (R,  C.  1905,  §  9253.) 

§  9980.  Making  False  Manifest.]  Every  person  guilty  of  preparing, 
making  or  subscribing  any  false  or  fraudulent  manifest,  invoice,  bill  of  lading, 
boat's  register  or  protest,  with  intent  to  defraud  another,  is  punishable  by 
imprisonment  in  the  penitentiary  not  less  than  one  and  not  exceeding  three 
years,  or  by  a  fine  not  exceeding  one  thousand  dollars,  or  both.  (R.  C.  1905, 
§  9254.) 


CHAPTER  70. 

Fraudulent  Destruction  of  Property  Insured. 

§  9981.  Destroying  Property  Insured.]  Every  person  who  willfully 
burns  or  in  any  other  manner  injures  or  destroys  any  property  whatever,  which 
is  at  the  time  insured  against  loss  or  damage  by  fire  or  by  any  other  casualty, 
with  intent  to  defraud  or  prejudice  the  insurer,  whether  the  same  is  the  prop- 
erty of  such  person  or  of  any  other,  is  punishable  by  imprisonment  in  the 
penitentiary  not  exceeding  seven  years  and  not  less  than  four.  (R.  C.  1905, 
§  9255.) 


STATE   OF  NORTH  DAKOTA 


123 


Arson  in  setting  fire  to  one's  own  building  to  injure  insurer.     32  L.  R. 

A.  648. 

As  to  similar  provision  in  Gal.  Pen.  Code,  section  548.     See  People  v. 

Fong  Hong,  120  Cal.  685,  53  Pac.  265.      - 

§  9982.  Presenting  False  Proof  of  Loss.]  Every  person  who  presents 
or  causes  to  be  presented  any  false  or  fraudulent  claim,  or  any  proof  in  support 
of  any  such  claim,  upon  any  contract  of  insurance,  for  the  payment  of  any  loss, 
or  who  prepares,  makes  or  subscribes  any  account,  certificate,  survey,  affidavit, 
proof  of  loss  or  other  book,  paper  or  writing,  with  intent  to  present  or  use  the 
same,  or  to  allow  it  to  be  presented  or  used  in  support  of  any  such  claim,  is 
punishable  by  imprisonment  in  the  penitentiary  not  less  than  one  and  not  ex- 
ceeding three  years,  or  by  a  fine  not  exceeding  one  thousand  dollars,  or  both. 
(R.  C.  1905,  §  9256.) 


Short  Rate  Table  at  Which  Policies  May  be  Cancelled. 


Per  Cent. 

Per  Cent. 

Per  Cent . 

Days 

of  Annua] 
Premium 

Days 

ol  Annual 
Premium 

Days 

of  Annual 
Premium 

\  _         -     -                                 2 

18 
19  — 

16 
16 

105 

120  or  4  months... 

45 

2 

4 

50 

3„ 

5 

20 

17 

135 

55 

4  „ 

6 

25     . 

19 

150  or  5  months..- 

60 

5    . 

'     7 

30-  - 

20 

165 

65 

6  — 

8 

35 

23 

180  or  6  months— 

67 

•j 

9 

40 
45 
50 

26 
27 
28 

195 

210  or  7  months— 
225 

73 

8  — 

9 

75 

9    - 

10 

78 

10  — 

10 

55  — 

29 

240  or  S  months— 

80 

11.. 

11 

60 

30 

255 

83 

12. 

12 

65  — 

33 

270  or  9  months 

85 

13  — 

13 

70  — 

36 

285 

88 

14  — 

13 
14 

75 
80  — 

37 
38 

300  or  10  months— 
315 

90 

15  — 

93 

16  — 

14 

85  — 

39 

320  or  11  months— 

95 

17  „ 

15 

90  or 

3  months  . 

40 

360  or  12  months— 

100 

Short  Rate  Table  fob  Term  Risks. 


Three-Year  Bisks 

Five-Year  Risks 

Term 

Per  Cent, 
of  Term 
Premium 

Per  Cent . 

Term                              of  Term 

Premium 

For  3  months  or  less 

Over   3  and  not  exceeding   6  months 
Over   6  and  not  exceeding   9  months 
Over   9  and  not  exceeding  12  months 
Over  12  and  not  exceeding  15  months 
Over  15  and  not  exceeding  18  months 
Over  IS  and  not  exceeding  21  months 
Over  21  and  not  exceeding  24;  months 
Over  24  and  not  exceeding  SET  months 
Over  27  and  not  exceeding  30  months 
Over  30  and  not  exceeding  33  months 
Over  33  months 

20 
30 
40 
50 
00 
70 
,75 
80 
85 
90 
95 
100 

For  5  months  or  less .. 

Oveir   5  and  not  exceeding  10  months 
Over  10  and  not  exceeding  15  months 
Over  15  and  not  exceeding  20  months 
Over  20  and  not  exceeding  25  months 
Over  25  and  not  exceeding  30  months 
Over  30  and  noti  exceeding  35  months 
Over  35  and  not  exceeding  40  months 
Over  401  and  not  exceeding  45  months 
i  ivtr  45  and  not  exceeding  50  months 
Over  50  and  not  exceeding  55  months 
Over  55  months 

20 
30 
40 
50 
60 
70 
75 
80 
85 
90 
96 
100 

124  INSURANCE  LAWS 

FEES 

Companies  of  All  Other  States  ok  Countries. 

Filing  articles  of  incorporation $  25.00 

Filing  annual   statement 10.00 

Certificate   of   authority 2.00 

Each  agent's  license  (one  for  each  member  of  a  firm)....       2.00 

Bach  copy  of  abstract  for  publication 2.00 

Two  and  one-half  per  cent,  of  gross  premiums  received   in   state. 

Foreign   states  or   nations  charging   greater   fees  than   the   above   for    like 
services  will  be  charged  at  the  same  rate  as  their  charges. 

State  Mutual  and  Joint  Stock  Companies  Organzed  Under  Laws  of  North 

Dakota. 

Filing  articles  of  incorporation $  25.00 

Filing   annual   statement 10.00 

Certificate   of   authority 2.00 

Each  agent's  license  (one  for  each  member  of  a  firm)  ....  2.00 

Each  copy  of  abstract  for  publication 2.00 

County  Mutuals.  * 

Company's  certificate   of  authority $     2.00 

One  copy  of  abstract  for  publication 2.00 

Fraternal  Beneficiary  Associations. 

Filing  annual  statement  and  issuing  license $   ]5.00 

Copy  of  records,  25  cents  per  folio  and  $1.00  for  seal. 


SUPPLEMENT  TO 

INSURANCE  LAWS 

OF  NORTH  DAKOTA 

Enacted  by  the 

Fourteenth  Legislative  Session 

1915 


INSURANCE  LAWS  OF 
NORTH  DAKOTA 

ENACTED   BY    THE 

FOURTEENTH  LEGISLATIVE  ASSEMBLE 
1915. 


STATE  BONDING  FUND. 

[Senate  Bill  No.  78.] 

AN  ACT  to  establish  a  State  Bonding  Fund  in  the  office  of  the  commissioner 
of  insurance,  providing  for  the  maintenance  thereof,  and  creating  a  reserve 
therefor ;  prescribing  the  duties  of  the  officers  connected  therewith ;  provid- 
ing for  the  payment  of  premiums  and  indemnities  for  losses;  and  providing 
for  the  disposal  of  the  surplus  after  said  reserve  has  been  created. 

Be  it  Enacted  by  the  Legislative  Assembly  of  the  State  of  North  Dakota: 

§  1.  Establishing  a  State  Bonding  Fund.]  A  state  bonding  fund  is 
hereby  established  for  the  purpose  of  providing  a  fund  for  the  bonding  of  such 
officers  of  counties,  cities,  towns,  villages,  school  districts  and  townships  as  are, 
or  may  hereafter  be  required  by  law  to  furnish  official  bonds. 

§  2.  Commissioner  op  Insurance  to  Issue  Bonds.]  It  shall  be  the  duty 
of  the  commissioner  of  insurance,  as  provided  in  this  act,  to  issue  official  bonds 
to  all  county  officials,  city  officials,  town  officials,  village  officials,  school  district 
officials,  and  township  officials  required  by  law  to  furnish  official  bonds  except 
as  hereinafter  otherwise  provided.  No  such  bonds  shall  be  issued  by  the  com- 
missioner of  insurance  for  the  bonding  of  any  official  for  a  greater  amount  than 
$50,000.00;  and  any  official  required  by  law  to  be  bonded  in  any  greater  amount 
than  $50,000.00,  shall  be  bonded  in  the  sum  in  excess  of  $50,000.00  with  a  duly 
authorized  surety  company  or  by  personal  sureties.  The  premiums  on  such 
excess  bonds,  except  in  the  case  of  personal  sureties,  shall  be  paid  out  of  the 
county,  village,  city,  town,  school  district  or  township  treasury  as  the  case  may 
be. 

If  an  official  who  is  bonded  by  both  the  state  bonding  department  and  other 
surety  makes  default,  then  the  loss  shall  be  borne  between  the  state  bonding 
department  and  such  other  surety  in  proportion  to  the  amount  of  bonds  fur- 
nished by  the  various  parties. 

§  3.  Premiums;  Amount;  to  Whom  Paid.]  The  premiums  of  such  bonds 
shall  be  twenty-five  cents  per  hundred  dollars  per  year  on  all  bonds  issued. 
Such  premium  shall  be  paid  in  advance  by  the  proper  authorities  of  each 
county,  city,  town,  village,  school  district  or  township,  from  its  respective 
treasury  to  the  state  treasurer,  who  shall  issue  receipts  therefor  as  hereinafter 


128  [NSURANCB  LAWS 

provided.  The  minimum  on  small  bonds  and  short  term  officers'  bonds  shall 
not  be  less  than  $2.50. 

§  4.  Whenever  there  shall  be  paid  into  the  state  treasury,  money  for 
premiums  for  bonding  officials  as  provided  in  this  act,  it  shall  be  known  as  the 
state  bonding  fund,  and  shall  be  used  as  provided  for  in  this  act. 

§  5.  It  shall  be  the  duty  of  the  state  treasurer  whenever  there  is  any 
money  paid  into  the  state  treasury  for  premiums  on  bonds,  to  at  once  issue 
quadruple  receipts  therefor.  One,  he  shall  issue  to  the  official  for  whom  the 
premium  is  paid,  one  he  shall  file  in  his  office,  one  he  shall  file  with  the  com- 
missioner of  insurance,  and  one  he  shall  file  with  the  state  auditor.  Such 
receipt  shall  state  the  amount  and  date  of  the  bond,  name  of  the  officer  bonded, 
and  his  official  duties,  his  post  office  address  and  the  county  in  which  he  resides. 

§  6.  Period  of  Bonds.]  All  bonds  executed  and  furnished  hereunder  by 
the  commissioner  of  insurance  shall  be  made  to  run  until  the  expiration  of  the 
officer 's  term  of  office,  and  where  such  term  is  less  than  one  year,  a  full  year 's 
premium  shall  be  charged. 

§  7.  Form  op  Bonds.]  All  counties,  cities,  towns,  villages,  school  districts 
and  townships  in  the  state  shall  be  insured  as  herein  provided  against  loss  by 
the  default  of  any  officer  of  such  counties,  cities,  towns,  villages,  school  districts 
and  townships  who  is  by  law  required  to  furnish  a  bond,  by  and  through  a  bond 
executed  by  the  officer  to  be  bonded  and  the  commissioner  of  insurance  in  his 
official  capacity,  which  bond  shall  be  payable  in  case  of  default  out  of  the  state 
bonding  fund.  Said  bonds  shall  be  substantially  in  the  following  form,  the 
blanks  being  properly  filled  out  and  the  bond  being  executed  by  the  official  and 
the  commissioner  of  insurance. 

§  S.     Official  Bond.]     Know  all  men  by  these  presents;  That 

of in  the  State  of  North  Dakota,  hereinafter  called  the  principal, 

and  the  state  bonding  fund  of  the  State  of  North  Dakota  as  surety,  are  held 

and  firmly  bound  unto in  the  State  of  North  Dakota,  hereinafter  called 

the  obligee,  in  the  sum  of   for  the  payment  whereof  to  the  obligee 

the  principal  binds  himself,  his  heirs,  executors,  administrators  and  assigns, 
and  the  commissioner  of  insurance  of  the  State  of  North  Dakota,  bind  the 
state  bonding  fund  of  the  State  of  North  Dakota  firmly  by  these  presents. 

Signed,  sealed  and  dated  this day  of 19.  .  .  . 

Whereas,  The  above  named  principal  lias  been  duly  appointed  or  elected  to 

the  office  of in  the  State  of  North  Dakota  for  the  term  of 

years  beginning  on 

Now,  Therefore,  The  condition  of  the  foregoing  obligation  is  such  that  if 
the  principal  shall  faithfully  and  impartially  discharge  and  perform  the  duties 
of  his  said  office,  including  such  duties  ae  are  or  may  be  imposed  upon  him  by 
law.  and  shall  render  a  true  account  of  all  moneys  and  property  of  every  kind 
that  shall  come  into  his  hands  as  such  officer  an«l  pay  over  and  deliver  the 
same  according  to  law,  this  obligation  shall  be  void,  otherwise  it  shall  remain 
in  force. 


Principal. 
State  Bonding  Fund,  Surety, 

By 

Commissioner  of  Insurance. 


STATE  OF  NORTH  DAKOTA  129 

Signed,  Sealed  and  Delivered  in  the  presence  of: 


§  9.  Appointment  op  Attorney  for  Service.]  The  officer  to  be  bonded 
shall,  prior  to  the  execution  of  such  bond,  execute  and  file  in  the  office  of  the 
commissioner  of  insurance,  an  instrument  appointing  the  commissioner  of 
insurance  and  his  successors,  his  true  and  lawful  attorney  upon  whom  all 
process  in  any  action  or  proceeding  against  such  officer  may  be  served,  and 
therein  shall  agree  that  any  process  which  may  be  served  upon  his  said  attorney, 
shall  be  of  the  same  force  and  validity  as  if  served  on  him  personally  and 
that  the  authority  thereof  shall  continue  in  force,  irrevocable  so  long  as  any 
liability  of  such  official  or  of  such  state  bonding  fund  remains.  In  actions 
upon  such  bond  when  the  sheriff  files  his  return,  that  he  is  unable,  after  diligent 
search,  to  find  such  bonded  officer  for  the  purpose  of  serving  the  summons, 
service  upon  the  commissioner  of  insurance  shall  be  deemed  and  held  to  be 
personal  service  upon  such  bonded  official.  Whenever  process  against  any  such 
bonded  official  shall  be  served  upon  the  commissioner  of  insurance,  he  shall 
forthwith  mail  a  copy  of  such  process,  postage  prepaid,  directed  to  such  bonded 
official  at  the  residence  of  such  official  stated  in  such  instrument.  The  com- 
missioner shall  keep  a  record  of  all  such  process  which  shall  show  the  time  and 
hour  of  service. 

§  10.  Bonds  Run  to  Whom.]  All  such  official  bonds  shall  run  to  the 
political  sub-division  of  which  the  bonded  official  is  an  officer,  as  obligee,  and 
such  bonds  shall  be  construed  as  provided  in  section  680  of  the  Compiled  Laws 
of  North  Dakota.  1913,  and  any  private  corporation  or  person  suing  such  official 
may  recover  under  such  bond  and  have  the  protection  of  the  state  bonding  fund. 

§  11.  State  Not  Liable.]  Any  obligee  or  private  corporation  or  person 
may  sue  upon  any  such  official  bond  issued  by  the  commissioner  of  insurance 
and  may  join  the  commissioner  of  insurance  as  a  co-defendant  with  the  default- 
ing officer  and  in  case  judgment  is  obtained  against  such  defaulting  officer,  the 
judgment  shall  further  specify  that  such  judgment  shall  be  paid  out  of  any 
funds  on  hand  in  the  state  bonding  fund,  or  that  may  thereafter  accrue  to  such 
fund.  In  case  a  judgment  is  paid  out  of  the  state  bonding  fund  in  any  such 
action,  the  state  bonding  fund  shall  be  subrogated  under  the  judgment  to  the 
right  of  the  judgment  creditor  to  recover  against  the  defaulting  officer.  In  all 
proceedings  to  enforce  such  right  of  subrogation  the  commissioner  of  insurance 
as  nominal  defendant  shall  act  for  and  in  behalf  of  the  state  bonding  fund; 
and  he  may  in  any  action  or  proceeding  appeal  from  any  appealable  order  or 
from  any  judgment  against  said  state  bonding  fund  the  same  as  is  provided 
for  other  parties  to  civil  actions. 

§  12.  Other  Bonds  May  be  Furnished.]  This  act  shall  not  be  construed 
to  prevent  any  person  elected  or  appointed  to  office  from  furnishing  in  lieu  of 
the  bond  provided  for  in  this  act.  a  bond  by  personal  sureties  or  by  a  surety 
company,  but  no  officer  or  board  of  any  county,  city,  town,  village,  school 
district  or  township  shall  have  the  right  to  pay  for  any  such  bond  or  bonds 
out  of  any  public  funds,  except  for  such  bonds  as  are  procured  to  cover  the 
excess  over  $50,000.00  as  provided  in  section  2. 

$  13.     Bonds.  How  Construed.]     The  bonds  issued  in  pursuance  of  this 


130  INSURANCE  LAWS 

act  shall  be  construed  and  held  to  inure  to  the  benefit  of  not  oniy  the  political 
sub-divisions  named  as  obligee  but  also  to  the  benefit  of  any  person  damaged 
by  any  wrongful  act  or  omission  of  the  bonded  official;  and  any  person  so 
damaged  may  in  an  action  upon  the  bond  brought  in  his  own  name  as  plaintiff 
against  the  official  bonded  join  the  commissioner  of  insurance  as  a  co-defendant, 
and  thereby  subject  the  state  bonding  fund  to  the  payment  of  any  judgment 
so  obtained. 

§14.  Clerical  Hklp  Provided,  Expenses,  How  Paid.]  It  shall  be  the 
duty  of  the  commissioner  of  insurance  and  the  state  auditing  board  to  estimate 
at  the  beginning  of  each  year  the  amount  required  for  additional  clerical  help 
and  incidental  office  expenses  made  necessary  by  the  additional  work  devolving 
upon  his  office  on  account  of  the  provisions  of  this  act  for  that  year,  which 
estimated  amount  shall  be  reserved  from  the  premiums  paid  in  and  shall  not 
exceed  the  sum  of  $1,500.00  per  annum.  The  amount  of  premium  receipts 
remaining  shall  be  used  for  the  payment  of  losses;  provided,  that  if  the 
amount  reserved  for  clerical  assistance  and  incidental  office  expenses  is  more 
than  sufficient  to  pay  the  same  the  excess  shall  be  used  to  pay  losses.  The 
commissioner  of  insurance  shall  have  the  authority  to  engage  clerical  assistance 
to  conduct  the  transactions  provided  for  by  this  act.  He  shall  also  prepare 
and  provide  the  necessary  blanks,  books,  stationery  and  postage  and  cause  the 
same  to  be  delivered  to  the  proper  officers  and  persons.  Such  expenses  and  the 
salaries  of  such  clerical  assistance  shall  be  audited  and  allowed  by  the  state 
auditing  board. 

<5  15.  Notice  of  Loss;  Duty  of  State  Examiner.]  "Whenever  a  loss  shall 
occur  in  any  county,  city,  village,  township  or  school  district  by  the  default  of 
any  officer  of  the  same  whose  fidelity  has  been  insured  under  the  provisions  of 
this  act,  it  shall  be  the  duty  of  the  county  auditor,  city  auditor,  village,  town- 
ship or  school  district  clerk  or  treasurer  in  case  the  defaulting  officer  is  the 
auditor  or  clerk,  as  the  case  may  be,  immediately  to  notify  the  commissioner  of 
insurance.  The  commissioner  of  insurance  shall  thereupon  notify  the  state 
examiner;  and  it  shall  be  the  duty  of  the  state  examiner  when  so  notified  to 
check  the  accounts  of  such  defaulting  official  and  file  a  report  with  the  com- 
missioner of  insurance. 

§  16.  Surplus.  How  Used.]  Any  sum  which  remains  unexpended  at  the 
end  of  any  one  year  shall  remain  in  the  state  bonding  fund  which  shall  accrue 
until  it  equals  in  amount  $100,000.00,  after  which  the  surplus  in  excess  of 
$100,000.00  shall  be  distributed  at  the  close  of  each  year  to  the  various  counties, 
cities,  townships,  villages,  school  districts  and  towns  in  proportion  to  the 
amount  of  premium  paid  into  the  state  bonding  fund.  In  case  there  shall  not 
be  a  sufficient  amount  in  the  state  bonding  fund  to  pay  the  losses  sustained 
after  the  reservation  of  funds  to  cover  clerical  assistance  and  other  incidental 
expenses  for  the  conduct  of  the  bonding  department  for  the  year,  such  losses 
shall  be  paid  as  soon  as  sufficient  funds  are  accumulated  in  the  state  bonding 
fund  by  collection  of  premiums. 

§  17.  Fund  to  Draw  Interest.]  The  state  treasurer  shall  deposit  the 
state  bonding  fund  in  approved  state  depositories  at  the  usual  rate  of  interest 
paid  on  other  funds  of  the  state,  subject  to  check,  but  whenever  there  is  in 
such  checking  account  more  than  $10,000.00  the  state  treasurer  shall  deposit 


STATE  OF  NORTH  DAKOTA  131 

the  same  upon  time  certificates  of  deposit  drawing  the  same  rate  of  interest 
as  other  state  funds  deposited  upon  time  certificates. 

§  18.  Report.]  The  commissioner  of  insurance  shall  on  or  about  the  first 
day  of  January  in  each  year,  publish  in  four  newspapers  of  general  circulation 
within  the  state  a  copy  of  the  statement  of  his  work  and  of  the  condition  of 
the  bonding  department  during  the  preceding  year,  and  he  shall  make  a  biennial 
report  to  the  governor  and  the  legislative  assembly  containing  a  detailed  state- 
ment of  the  work  and  the  condition  of  said  bonding  department  during  the 
preceding  biennial  period. 

§  19.  May  Require  Statements.]  The  commissioner  of  insurance  shall 
require  and  obtain  from  the  various  officials  bonded  statements  annually  and  as 
often  as  he  deems  necessary,  of  their  receipts,  bank  accounts  and  disbursements 
verified  by  the  county  auditor,  city  auditor,  or  clerk  of  each  town,  village,  school 
district  and  township.  To  verify  such  statements  he  may  communicate  with  each 
bank  having  such  deposits  and  he  may  require  any  such  official  to  furnish  him 
with  any  information  concerning  the  office  of  which  he  is  an  incumbent  and  said 
commissioner  shall  file  all  such  information  in  his  office  in  a  proper  manner  and 
such  records  and  files  shall  be  open  for  public  inspection.  The  commissioner 
of  insurance  shall  supply  to  each  county  and  city  auditor  and  each  town,  village, 
school  district,  and  township  clerk,  a  sufficient  number  of  application  blanks. 

§  20.  State  Examiner  to  Check  Accounts.]  In  case  any  official  shall 
default,  it  shall  be  the  duty  of  the  state  examiner  immediately  to  check  the 
accounts  of  such  defaulting  official  and  file  a  report  with  the  commissioner  of 
insurance  stating  the  amount  due  upon  such  defaulting  officer's  bond  and  for 
such  services  he  shall  be  paid  out  of  the  state  bonding  fund,  the  same  fees  as 
he  is  paid  for  examining  the  accounts  of  county  officers. 

§  21.  May  Require  an  Accounting.]  If  at  any  time,  the  commissioner 
of  insurance  shall  be  of  the  opinion  that  the  interests  of  the  state  bonding  fund 
are  jeopardized  by  the  misconduct  or  inefficiency  of  any  bonded  official,  it  shall 
be  his  duty  to  cause  an  action  for  an  accounting  to  be  instituted  against  such 
bonded  official  for  the  purpose  of  requiring  a  complete  disclosure  of  the  busi- 
ness of  the  office  of  which  such  official  is  an  incumbent.  Such  action  shall  be 
brought  in  the  name  of  the  commissioner  of  insurance  as  plaintiff  and  the 
court  may  in  such  action  interplead  the  obligee  and  render  such  judgment  as 
shall  protect  the  rights  of  all  parties  concerned.  If  at  any  time  the  commis- 
sioner of  insurance  deems  it  advisable,  it  shall  be  his  duty  to  make  a  complaint 
to  the  governor  requesting  the  governor  to  institute  an  investigation  with  the 
purpose  of  removing  from  office  any  defaulting  official  or  any  official  who  so 
conducts  the  affairs  of  his  office  as  to  endanger  the  state  bonding  fund. 

§  22.  Duty  of  Attorney  General.]  It  is  hereby  made  the  duty  of  the 
attorney  general  to  act  as  attorney  for  the  commissioner  of  insurance  in  any 
and  all  actions  and  proceedings  to  which  the  commissioner  of  insurance  is  a 
party,  on  behalf  of  the  state  bonding  fund. 

§  23.  Commissioner  May  Reject  Application.]  When  any  official  applies 
to  the  commissioner  of  insurance  for  the  issuance  to  him  of  an  official  bond,  the 
commissioner  of  insurance  may,  after  due  investigation,  reject  such  application 
if  in  his  judgment  the  interests  of  the  state  bonding  fund  require  such  action. 
In  such  case  the  official  whose  application  is  rejected  may  secure  a  bond  exe- 


132  INSURANCE  LAWS 

cuted  either  by  private  surety  or  by  a  duly  authorized  surety  company,  but 
no  officer  or  board  of  any  political  sub-division  shall  have  the  power  to  disburse 
public  funds  to  pay  the  premium  on  such  bonds. 

§  24.  Appeal.]  The  commissioner  of  insurance  shall  immediately  notify 
the  applicant  of  such  rejection  by  registered  mail,  and  the  applicant  shall  have 
twenty  days  after  the  receipt  of  such  notice  within  which  to  take  an  appeal 
from  such  decision  of  the  commissioner  of  insurance  to  the  district  judge  of 
the  judicial  district  in  which  the  applicant  resides.  The  judge  of  said  court 
shall  hear  such  appeal  at  a  day  to  be  fixed  by  him  not  less  than  ten  nor  more 
than  thirty  days  after  the  filing  of  the  appeal  with  the  clerk.  The  case  shall 
be  tried  by  the  court  without  a  jury.  Notice  of  such  appeal  shall  be  served 
by  the  appellant  upon  the  commissioner  of  insurance. 

§  25.  Repeal.]  All  acts  and  parts  of  acts  in  so  far  as  they  conflict  with 
the  provisions  of  this  act  are  hereby  repealed. 

§  26.     This  act  shall  take  effect  January  1st,  1916. 

Approved,  March  8,  1915. 


[House  Bill  No.  165.    Laws  1915.] 

Providing  pok  County  and  District  Mutual  Insurance  Companies. 

AN  ACT  Providing  for  the  organization,  regulation  and  general  management 
of  county  and  district  mutual  fire,  lightning  and  cyclone  insurance  com- 
panies, and  repealing  acts  and  parts  of  acts  in  conflict  therewith. 

Be  it  'Enacted  by  the  Legislative  Assembly  of  the  State  of  North  Dakota: 

Article  1. 

§  1.  Any  number  of  persons,  not  less  than  fifty,  residing  in  not  more  than 
ten  counties  in  this  state,  who  collectively  own  property  of  not  less  than  one 
hundred  thousand  dollars  in  value,  which  they  desire  to  insure,  or  any  number 
of  persons  not  less  than  twenty-five,  residing  in  any  one  county,  owning  prop- 
erty of  not  less  than  twenty-five  thousand  dollars  in  value,  which  they  desire 
to  insure,  may  form  a  corporation  for  mutual  insurance  against  loss  or  dam- 
age by  fire,  lightning  or  cyclone,  or  all  of  the  above,  which  shall  possess  the 
powers  and  be  subject  to  the  duties  and  liabilities  of  other  insurance  com- 
panies, except  as  hereinafter  provided: 

The  principal  office  of  the  corporation  must  be  located  within  the  limits  of 
the  county  or  counties  in  which  the  incorporators  reside.  The  name  of  the 
county,  together  with  the  word  "county"  shall  be  embraced  in  the  corporate 
name  of  the  company  when  organized  by  the  residents  of  a  single  county. 
Provided,  that  any  corporation,  organized  under  the  provisions  of  this  act  for 
mutual  protection  against  loss  or  damage  by  tornadoes,  wind  storms,  and 
cyclones  only,  may  operate  and  issue  policies  in  all  the  counties  of  the  state, 
but  shall  in  all  other  matters  be  regulated  and  limited  by  the  provisions  of 
this  act. 

§  2.  Such  persons  shall  file  with  the  commissioner  of  insurance  a  declara- 
tion of  their  intention  to  form  a  company  for  the  purpose  expressed  in  the 
preceding  section,  which  declaration  shall  be  signed  by  not  less  than  three  of 


STATE  OF  NORTH  DAKOTA  133 

the  incorporators,  and  shall  be  accompanied  by  sufficient  evidence  of  the  execu- 
tion of  bona  fide  application  for  such  insurance  to  the  number  and  amount 
stated  in  the  preceding  section,  and  which  said  declaration  shall  contain  a  copy 
of  the  articles  of  incorporation  proposed  to  be  adopted  by  said  incorporations. 
Such  articles  of  incorporation  shall  set  forth  the  name  of  the  corporation,  the 
name  of  the  city,  town  or  village  in  which  the  business  office  of  such  company 
is  to  be  located,  and  the  intended  duration  of  the  company,  and  if  it  is  found 
conformable  to  this  act  and  not  inconsistent  with  the  laws  and  constitution  of 
this  state,  the  commissioner  of  insurance  shall  thereupon  deliver  to  such  per- 
sons a  certified  copy  of  its  articles  of  incorporation,  and  a  certificate  to  the 
effect  that  said  corporation  has  complied  with  all  the  requirements  of  law, 
\\ huh,  on  being  filed  in  the  office  of  the  register  of  deeds  of  the  county  where 
the  principal  office  of  the  corporation  is  located  shall  be  its  authority  to  com- 
mence business  and  issue  policies,  and  such  certified  copy  of  the  articles  of 
incorporation  and  of  such  certificate  may  be  used  for  or  against  such  com- 
pany, with  the  same  effect  as  the  original,  and  shall  be  conclusive  evidence  of 
the  fact  of  the  organization  of  such  corporation. 

§  o.  The  number  of  directors  shall  be  not  less  than  five  (5)  and  not  more 
than  fifteen  (15)  a  majority  of  whom  shall  constitute  a  quorum  to  do  business, 
to  be  elected  by  the  members  of  said  company  in  the  manner  provided  by  the 
by-laws  of  said  company,  and,  if  not  otherwise  provided,  by  ballot,  of  whom 
one-third  shall  be  elected  for  one  year,  one-third  for  two  years  and  one-third 
for  three  years,  and  until  their  successors  are  elected  and  qualified ;  in  all 
subsequent  elections,  except  to  fill  vacancies,  one-third  of  said  board  of  directors 
shall  be  elected  for  three  years;  said  election  shall  be  held  at  the  annual  meeting 
of  the  company  which  shall  be  held  on  the  second  Thursday  of  January  of  each 
year,  unless  otherwise  provided  by  their  by-laws.  In  the  election  of  the  first 
board  of  directors  each  incorporator  shall  be  entitled  to  one  vote.  At  every 
subsequent  election  each  person  insured  shall  be  entitled  to  one  vote  for  each 
director  to  be  elected.  Twenty  members  shall  constitute  a  quorum  at  such 
annual  meeting  for  the  transaction  of  business. 

§  4.  The  directors  shall  elect  from  their  number,  a  president,  and  a  vice- 
president,  and  shall  also  select  a  secretary  and  treasurer,  who  may  or  may  not 
be  members  of  the  company,  all  of  whom  shall  hold  their  office  for  one  year, 
and  until  their  successors  are  elected  and  qualified,  provided,  that  the  office  of 
secretary  and  treasurer  may  both  be  held  by  one  person. 

§  5.  The  treasurer  and  secretary  shall  each  give  bonds  to  the  company  for 
the  faithful  performance  of  their  duties  in  such  amounts  as  shall  be  prescribed 
by  the  board  of  directors. 

§  6.  Such  corporation  and  its  directors  shall  possess  the  usual  powers  and 
be  subject  to  the  usual  duties  of  colorations  and  directors  thereof  and  may 
make  by-laws,  not  inconsistent  with  the  constitution  or  laws  of  this  state,  as 
may  be  deemed  necessary  for  the  management  of  its  affairs  in  accordance  with 
the  provisions  of  this  act;  also  to  prescribe  the  duties  of  its  officers  and  fix 
their  compensation,  and  to  alter  and  amend  its  by-laws  when  necessary. 

§  7.  Any  person  owning  property  within  the  limits  of  the  territory  in  which 
such  company  is  authorized  to  transact  business  may  become  a  member  of  such 
company  by  insuring  therein,  and  shall  be  entitled  to  all  the  rights  and  priv- 


134  INSUEANCE  LAWS 

ilcges  appertaining  thereto;  but  no  person  not  residing  within  said  territory 
shall  become  a  director  of  said  company. 

§  8.  No  company  formed  under  the  provisions  of  this  act  shall  insure  any 
property  beyond  the  limits  of  the  territory  comprised  in  the  formation  of  such 
company,  nor  shall  it  insure  any  property  other  than  detached  dwellings,  their 
contents;  farm  buildings,  their  contents;  country  school  houses,  furniture, 
books  and  fixtures;  country  churches,  furniture  and  other  contents;  automobiles, 
only  while  in  the  buildings  on  premises;  live  stock  on  the  premises  or  anywhere 
within  the  limits  of  said  territory;  farm  machinery  and  vehicles  in  the  build- 
ings or  on  the  premises,  including  threshing  machines  while  not  in  service,  only, 
and  hay  or  grain  in  stack  on  said  premises;  said  policies  may  cover  loss  or 
damage  to  live  stock,  harness  and  vehicles  temporarily  taken  from  the  territory 
of  the  company;  provided,  said  live  stock,  harness  and  vehicles  be  not  removed 
to  exceed  twenty-five  miles  from  the  territory  of  the  company.  Said  policies 
shall  be  issued  for  not  to  exceed  five  years,  and  not  to  extend  beyond  the 
limited  duration  of  said  company.  Nor  shall  any  policy  be  issued  covering 
property  located  within  the  platted  limits  of  any  incorporated  city,  town  or 
village  in  this  state. 

§  9.  Any  such  company  may  classify  the  property  insured  therein  at  the 
time  of  issuing  policies  thereon  under  different  rates  corresponding  as  nearly 
as  may  be  to  the  greater  or  less  risk  from  fire  or  lightning  and  loss  which  may 
attach  to  each  several  buildings  insured. 

§  10.  Every  person  insured  under  the  provisions  of  this  act  shall  give  his 
undertaking,  bearing  even  date  with  the  policy  so  issued  to  assigns,  to  pay  his 
pro  rata  share  to  the  company  of  all  losses  or  damages  by  fire,  lightning  or 
cyclone,  which  may  be  sustained  by  any  member  thereof,  which  said  undertaking 
shall  be  filed  with  the  secretary  in  the  office  of  said  company  before  the  issuance 
of  such  policy,  and  shall  remain  on  file  in  the  office  except  when  required  to 
be  produced  in  court  as  evidence.  He  shall  also  at  the  time  of  receiving  such 
insurance  pay  such  percentage  in  cash,  or  such  reasonable  sum  named  in  the 
policy  as  may  be  required  by  the  rules  and  by-laws  of  the  company. 

§  11.  Every  member  of  such  company  who  may  sustain  loss  or  damage  by 
fire,  lightning  or  cyclone,  shall  immediately  notify  the  secretary  of  such  com- 
pany, or  in  case  of  his  absence,  the  president  thereof,  which  officer  shall  forth- 
with ascertain  and  cause  to  be  adjusted  in  manner  provided  for  in  the  by-laws 
of  said  company,  or  forthwith  convene  the  directors  of  said  company,  whose 
duty  it  shall  be  to  appoint  a  committee  of  not  more  than  three  members  of 
such  company  to  ascertain  the  amount  of  such  loss,  and  in  case  of  the  inability 
of  the  parties  to  agree  upon  the  amount  of  damage  the  claimant  shall  choose 
a  disinterested  party,  and  the  company  shall  choose  a  disinterested  party,  who 
shall  constitute  a  board  of  arbitration  to  settle  such  loss,  and  in  case  these 
parties  cannot  agree,  they  shall  choose  a  third  party  to  act  with  them  and  such 
board  of  arbitration  shall  have  power  to  examine  witnesses  and  to  determine 
all  matters  in  dispute  and  the  decision  of  such  board  shall  be  final.  Any  officer 
or  member  of  such  company  acting  as  an  adjuster,  and  the  members  of  any 
hoard  of  arbitration  which  may  be  appointed  in  accordance  with  the  provisions 
of  this  section  shall  have  full  power  to  subpo?na  witnesses,  administer  oaths, 
examine  witnesses  and  take  acknowledgments  while  acting  in  the  capacity  of 
such  adjuster  or  member  of  board  of  arbitration. 


STATE  OF  NORTH  DAKOTA  135 

§  12.  Whenever  the  amount  of  any  loss  shall  have  been  ascertained  if  it 
exceed  the  amount  of  cash  funds  of  the  company  applicable  to  the  payment  of 
such  loss,  the  president  shall  convene  the  directors  of  the  company,  who  shall 
make  an  assessment  sufficient  at  least  to  pay  such  loss  from  all  members  of  the 
company  in  proportion  to  the  amount  of  insurance  carried.  Provided,  that,  if 
there  be  no  quorum  present,  the  secretary  shall  enter  the  fact  on  his  journal  and 
the  names  of  the  directors  present,  whereupon  the  president,  secretary  and  treas- 
urer shall  proceed  to  estimate  the  rate  per  cent,  necessary  to  cover  the  loss  and 
expense  thereby  incurred,  and  assess  the  same  upon  all  the  insured  members 
of  the  said  company,  which  said  assessment  shall  be  valid  and  shall  be  collected 
in  the  same  way  as  though  it  had  been  made  by  the  board  of  directors,  in  the 
regular  manner.  The  board  of  directors  may  levy  and  collect  an  assessment 
for  the  purpose  of  providing  funds  for  the  payment  of  current  expenses  of  the 
company  or  for  the  purpose  of  establishing  a  permanent  loss  fund,  which 
permanent  loss  fund  shall  at  no  time  exceed  one  per  cent,  of  the  insurance  in 
force,  and  such  assessments  so  levied  shall  be  collectible  in  the  same  manner 
as  assessment  made  for  the  payment  of  current  losses.  In  case  an  assessment 
made  shall  not  be  collected  at  the  time  same  is  due  and  the  amount  actually 
collected  is  insufficient  to  pay  the  losses  or  expenses  of  the  company,  then  a 
second  assessment  shall  be  made,  in  the  manner  above  provided,  upon  the  policy 
holders  who  have  paid  their  assessment  for  an  amount  that  shall  be  sufficient  to 
pay  all  losses  and  expenses  in  full.  Such  assessments  shall  be  made  from  time 
to  time  until  a  sufficient  amount  is  collected  to  pay  all  losses  and  expenses  in 
full.  In  case  any  such  delinquent  assessment  is  collected  after  other  assessments 
have  been  made  and  collected,  then  such  assessment  so  collected  shall  be  added 
to  the  permanent  loss  fund. 

§  13.  It  shall  be  the  duty  of  the  secretary  whenever  such  assessments  shall 
have  been  completed  to  notify  every  member  of  such  company  by  letter  smt 
to  his  last  known  post  office  address,  postage  prepaid,  of  the  amount  of  such 
assessment,  the  purpose  for  which  made,  and  if  for  the  payment  of  certain 
losses,  the  amounts  of  such  losses,  the  sum  due  from  such  member  as  his  share 
of  such  assessment,  the  time  when  and  to  whom  payment  shall  be  paid  which 
shall  not  be  less  than  thirty  nor  more  than  sixty  days  from  the  date  of  such 
notice.  The  board  of  directors  shall  have  the  authority,  in  their  discretion  to 
borrow  money  for  the  payment  of  any  unpaid  losses,  said  borrowed  monev  to 
be  repaid  from  moneys  collected  from  the  next  ensuing  assessment  levied  in 
accordance  with  the  provisions  of  this  act. 

§  14.  Suits  at  law  may  be  brought  against  any  member  of  said  company 
who  shall  neglect  or  refuse  to  pay  any  assessment  made  upon  him  under  the 
provisions  of  this  act;  and  the  directors  of  any  company  so  formed  who  shall 
willfully  refuse  or  neglect  to  perform  the  duties  imposed  upon  him  by  the  pro- 
visions of  this  act,  shall  be  liable  in  their  individual  capacity  to  any  person 
sustaining  such  loss.  Suits  at  law  may  also  be  brought  and  maintained  against 
such  company,  by  members  thereof,  for  losses  sustained  if  payment  is  withheld 
after   such  losses  have  become  due. 

§  15.  Any  member  of  such  company  may  withdraw  therefrom  by  surrender- 
ing his  policy  for  cancellation  at  any  time  while  the  company  continues  to 
transact  the  business  for  which  it  was  organized,  by  giving  notice  in   writing 


136  INSURANCE  LAWS 

to  the  secretary  thereof,  and  paying  his  share  of  all  claims  then  existing  against 
Baid  i-ompany;  provided,  that  by  the  withdrawal  of  such  member,  the  number 
of  members  remaining  in  such  company  shall  not  be  reduced  below  the  original 
number  of  incorporators,  or  that  the  assets  will  not  be  reduced  below  the  amount 
at  the  time  of  incorporation;  provided,  further,  that  the  company  shall  have 
power  at  any  time  to  terminate  or  cancel  any  policy,  by  giving  the  insured 
written  notice  to  that  effect  and  returning  to  such  insured  any  unearned  pre- 
mium which  he  may  have  paid,  pro  rata. 

§  16.  Non-residents  of  any  county  in  this  state,  owning  property  therein, 
may  become  members  of  any  company  incorporated  under  this  act,  and  shall 
be  entitled  to  all  the  rights  and  privileges  pertaining  thereto,  except  that  they 
cannot  become  directors  of  such  company. 

§  17.  No  company  formed  under  the  provisions  of  this  act  shall  continue 
for  a  longer  term  than  thirty  years. 

§  18.  The  secretary  of  the  company  shall  prepare  and  submit  to  the  mem- 
bers thereof,  at  each  annual  meeting,  a  copy  of  the  annual  statement  required 
to  be  filed  with  the  commissioner  of  insurance,  as  provided  in  section  4949  ot 
the  compiled  laws  of  1913,  of  the  State  of  North  Dakota. 

§  19.  In  all  other  respects  companies  organized  under  the  provisions  of 
this  act,  shall  be  subject  to  the  provisions  of  the  general  laws  of  the  State  of 
North  Dakota  relating  to  such  insurance  companies. 

j  20.  Any  such  companies  now  organized  and  transacting  business  in  this 
state,  whose  articles  of  incorporation  or  by-laws  or  any  part  of  them  conflict 
with  the  provisions  of  this  act,  shall  within  a  reasonable  time  after  the  passage 
and  approval  of  this  act,  amend  such  articles  or  by-laws  to  conform  to  the 
provisions  hereof  and  file  such  amendments  with  the  commissioner  of  insurance. 

§  21.  All  acts  or  parts  of  acts  which  conflict  with  the  provisions  of  this 
act  are  hereby  repealed. 

Approved,  March  9,  1915. 


[Senate  Bill  No.  103.] 

Exempting  Life  Insurance  Policies  From  Claims  of  Creditors. 

AN  ACT  to  exempt  policies  of  life  insurance  and  annuities  from  the  claims  of 
creditors,  in  certain  cases. 

Be  it  Enacted  by  the  Legislative  Assembly  of  the  State  of  North  Dakota: 

§  1.  The  surrender  value  of  any  policy  of  life  insurance,  which  policy  of 
insurance  would  upon  the  death  of  the  insured  be  payable  to  the  wife  or  chil- 
dren or  any  relative  of  the  insured  dependent  or  liable  to  be  dependent  upon 
him  for  support,  shall  be  absolutely  exempt  from  the  claims  of  creditors  of 
the  insured,  and  no  creditor  and  no  court  or  officer  of  a  court  acting  for  the 
creditors  of  such  insured  shall  have  the  right  under  any  circumstances  to  elect 
for  the  insured  to  have  such  policy  of  insurance  surrendered  or  in  anywise 
converted  into  money;  and  no  such  policy  of  life  insurance  and  no  property 
right  therein  belonging  to  the  holder  and  no  value  thereof  shall  under  any 
circumstances,  be  subject  to  seizure  under  any  process  of  any  court. 
Approved,  March  5,  1915. 


GENERAL  INDEX 

Insurance  Commissioner — Duties:  Section 

In    general,    enumerated 172,  176 

Fees    173 

Salary    174 

State  examiner  to  act  as,  when 175 

insurance  tax  for  fire  departments: 

Tax  for  cities,  towns,  and  villages,  fire  departments 3993-3998 

Corporations : 

Defined     4494 

Reserved  power  of  legislative  assembly 4495 

Collateral  inquiry  prohibited 4496 

Name  required    4497 

Corporations    classified 4498 

Public   corporations,   how  regulated 4499 

Private    corporations 4500 

Contents  of  articles 4505 

Articles,    railways,    etc 4507 

Assessment  of  stock: 

When  levied   4570 

Limitation   of 4571 

General  provisions: 

Terms  defined   4834 

Provisions  common  to  all  domestic  insurance  companies: 

Subject  to  what  provisions  of  law 4835 

How,  and  for  what  purpose  formed 4836 

Articles,    contents    4837 

Qualifications  of  directors,  residence 4838 

Examination   of  articles  by   attorney   general,  by   commissioner   of 

insurance,   certificate    4839 

Reinsurance     4840 

Limitation   of  trade   4841 

Limitation  on  purchase  and  conveyance  of  real  estate 4842 

Capital   and  surplus  invested 4843 

Dividends  only  from  surplus  profits.     Profits,  how  estimated 4844 

Penalty  for  violation  of  section  4843 4845 

Domestic  Life  Insurance  Companies  to  deposit  securities  with  Commis- 
sioner of  Insurance: 

Annual   statement    4846 

Commissioner  ascertains  value  of  policies.     Securities  to  be  deposited  4847 

( Vrtificate  of  authority    4848 

On  default  securities  vest  in  policy  holders 4849 

Securities  may  be  exchanged 4850 

Dividends  on  securities  property  of  company 4851 

Exception  to  act   4852 


138  GENERAL  INDEX 

Section 
Misrepresentation  by  Insurance  Companies: 

Prohibited 4853 

Penalty    4854 

Discrimination  by  Life  Insurance  Companies: 

Prohibited     4855 

Penalty    4856 

Disbursements  by  Life  Insurance  Companies: 

Voucher  required   4857 

Diversion  of  funds  for  political  purposes  by  Life  Insurance  Companies: 

Unlawful  to  aid  political  parties.     Penalty 4858 

Salaries  of  Officers  and  Agents  of  Life  Insurance  Companies: 

Expense  of  officers,  how  regulated 4859 

Investment  of  funds  of  Life  Insurance  Companies: 

Investment  of  funds  restricted '. 4861 

Holding  of  real  property  limited 4862 

Provisions  peculiar  to  Domestic  Stock  Insurance  Companies: 

Capital  stock  required 4863 

Opening  books   for   subscriptions 4864 

Notice  to  company  when  capital  stock  is  impaired 4865 

How  capital  made  good.    Forfeiture  of  shares 4866 

Capital  stock  reduced.     Examination  and  certificate  of  commissioner  4867 

Capital  less  than   liabilities 4868 

Transfer  of  stock  pending.     Examination  does  not  release  liabilities  4869 

Provisions  peculiar  to  Domestic  Mutual  Insurance  Companies: 

Amount  of  subscribed  insurance  required 4870 

Insured  a  member.     Notice  of  meetings 4871 

Same    4872 

Manner  of  voting  by  proxy   4873 

Premium  contingent  liability.     Stated  on  policy 4874 

Reserve  fund,   how  used 4875 

Temporary  capital  may  be  retired 4876 

Members  entitled  to  share  of  net  profits 4877 

Distribution  of  surplus  on  life  policies 4878 

Assessments,  when  and  how  made ; . .  4879 

Making  premium  reserve  good.     Single  assessment.    Cancellation  of 

policies.     Double   assessment.     Reinsurance 4880 

Directors  personally  liable  for  making  and  collecting  assessments.  .  4881 

Surplus  of  Life  Insurance  Companies: 

Surplus  apportioned  annually  4882 

Exception    4883 

Contingency  reserve    4884 

Rights  of  policy  holders 4885 

Automatic  insurance   4886 

'  'ontra    agreement    forbidden 4887 


GENEEAL  INDEX  139 

Section 
Consolidation  and  Reinsurance  of  Domestic  Insurance  Companies: 

Consolidation  forbidden   4888 

Petition    for    consolidation 4889 

Duty  of  insurance  commissioner 4890 

Commission     4891 

Expense  paid   4892 

Penalty  for  violation   4893 

Provisions  peculiar  to  Mutual  Hail  Insurance  Companies: 

Foreign  mutuals  prohibited.     Contracts  void.     Penalty 4894 

Penalty    4895 

Mutual  insurance  companies  engaged  in  hail  business,  when 4896 

Duties  of  state  treasurer 4897 

Penalty    4898 

Relinquish  business,  how   4899 

Companies  collect  interest   4900 

Proceedings,  who  institute 4901 

Time  when  Hail  Insurance  policies  take  effect: 

Twenty-four  hours  after  application  taken 4902 

Exception    4903 

Provisions  peculiar  to  Fidelity  Insurance  Companies: 

Fidelity  insurance  and  corporate  suretyship.     Sole  surety 4904 

Acceptance  of  such  bond 4905 

Expense  of  bond,  how  paid 4906 

Must  comply  with  laws  of  state 4907 

Domestic    surety    companies 4908 

Concurrent  undertakings   4909 

Relief  from  liability  4910 

Report    of    taxes 4911 

Held  responsible    4912 

Provisions  peculiar  to  Foreign  Insurance  Companies: 

Condition  of  admission.  Articles  and  statement  filed.  Must  be 
legally  organized.  Appoint  commissioners,  its  attorney  for  serv- 
ice.    Resident  agents 4913 

Provisions  common  to  all  Insurance  Companies: 

Limit  of  risk 4914 

Annual   statement,   publication    thereof 4915 

Contents  of  annual  statement 4916 

Statements  verified.     Duty  of  commissioner 4917 

Statements  of  receivers 4918 

Inquiry  into  condition  of  company 4919 

Agents  must  not  act  without  certificate 4920 

Examination  before  granting  certificates.    When  domestic  companies 

examined.     Examination  of  foreign  companies.     Expense 4921 

Authority  revoked  for  false  statement.     When  revocation  set  aside.  4922 

Commissioner  must  ascertain  net  cash  value  of  life  policies 4923 

Tax,   how'  levied 4924 


140  GENERAL   INDEX. 

Section 

Authority  of  foreign  or  domestic  company  revoked,  how 4925 

Insurance   by   resident   agents   only 4926 

Penalty  for  not  making  statement,  for  false  statement 4927 

Penalty  when  there  is  no  specific  provision 4928 

Fees     4929 

Same  condition  imposed  on  companies  of  other  states  as  they  impose 

on  domestic  companies 4930 

Rejjort  of  Life  Insurance  Companies: 

Annual  report,  contains  what 4931 

Live  Stock : 

General   laws    govern 4951 

Live  stock  insurance  companies,  how  organized 4952 

Management     4953 

Board  of  directors  to  elect  officers  and  fix  bond 4954 

Members  may  vote  by  proxy 4955 

Amount  of  subscribed  insurance  required 4956 

Chattel  Mortgages  in  Application: 

Chattel  mortgages  void  unless  on  separate  paper 4957 

Penalty  for  violating  last  section 4958 

Licensing  Insurance  Agents: 

Agents  defined 4959 

Must  have  license.     Penalty  for  non-compliance 4960 

Eesident  Agents  for  Transaction  of  Fire  Insurance  Business: 

Foreign  agents 4961 

Cannot    reinsure    4962 

Insurance  commissioner.     Examine  records,  books,  etc 4963 

Penalty  for  violation   4964 

Accident   and   Sickness   Insurance   Corporations,   Associations   and   So- 
cieties: 

Number  requisite  to   organize 4965 

Compliance  required   4966 

Articles,  state  what   4967 

Name   forbidden    4968 

Application  contains  what 4969 

Agents  must  have  certificate  of  authority 4970 

By-laws    4971 

Age  of  members   4972 

Annual   report    4973 

Reserve  fund    4974 

Duty  of  insurance  commissioner 4975 

Company 's  certificate  of  authority 4976 

Voting  proxy    4977 

Limit  time  of  suit 4978 

Reciprocal  penalties   4979 

Foreign  corporations,  licensed  when 49S0 


GENERAL  INDEX  141 

Section 
Fraternal  Benefit  Societies: 

Fraternal  benefit  societies  defined 5059 

Lodge    system    defined 5060 

Representative  form  of  government  defined ? 5061 

Exemptions    5061a 

Benefits    5062 

Beneficiaries     5063 

Qualifications  of  membership   5064 

Certificate    5065 

Funds    5066 

Investments     5067 

Distribution  of  funds  5068 

Organization     5069 

Powers  retained.      Reincorporation.      Amendments 5070 

Mergers  and  transfers   5071 

Annual  license   5072 

Admission  of  foreign  society   5073 

Bowers  of  attorney  and  service  of  process 5074 

Place  of  meeting,  location  of  office 5075 

No  personal  liability    5076 

Waiver  of  the  provisions  of  the  laws 5077 

Benefit  not  attachable   5078 

Constitution  and  laws.     Amendment   5079 

Annual    reports    5080 

Provisions  to  insure  future  security 5081 

Alternative   provisions    5082 

Examination  of  domestic  societies 5083 

Application  for  receiver 5084 

Examination  of  foreign  societies   , 5085 

No  adverse  publications  5086 

Revocation    of    license 5087 

Exemption  of  certain  societies 5088 

Taxation    ." 5089 

Penalties    5090' 

Definition  of  Insurance: 

Defined 645S 

What  May  be  Insured: 

Insurable    interest     6459 

Insurance    classified    6460 

All  kinds  subject  to  this  chapter 6460a 

Parties  to  the  Contract: 

Insurer  and  insured  defined 6461 

Who  may  insure   6462 

Who  may  be  insured 6463 

Insurance   of   mortgaged   property 6464 

Same,  new  contract    6465 


]42  GENERAL  INDEX 

Section 
Insurable  Interest: 

Defined 6466 

Classified     6467 

Carrier  or  depository  has 6468 

Contingent  or  expectant  interest  not 6469 

Measure  of   6470 

Insurance  without  interest  void   6471 

When  interest  must  exist 6472 

When  change  of  interest  suspends  insurance 6473 

Change  after  loss  does  not  affect 6474 

Change  in  one  of  several  things 6475 

Incumbrance  or  reinsurance  of  one  of  several  things 6476 

Change  of  interest  by  death 6477 

Change  among  joint  owners   6478 

Stipulation  of  interest  void 6479 

Concealment  and  Representation: 

Concealment  defined   6480 

Rescission  on  account  of 6481 

Mutual   disclosures    6482 

What  not  bound  to  disclose 6483 

How   materiality   determined 6484 

Presumption  of  knowledge   6485 

Right  to  information  waived 6486 

Information  as  to  interest   6487 

Rescission  for  fraudulent  concealment 6488 

Matters  of  opinion   6489 

Form  of  representation   6490 

When  may  be  made 6491 

Rules  of  interpretation 6492 

What  deemed  promise    6493 

Cannot  qualify  contract;  may,  implied  warranty 6494 

When  may  be  withdrawn '. 6495 

Time  to  which  refers   6496 

On  information  and  belief   6497 

When   deemed  false    6498 

Effect  of  falsity   6499 

How  materiality   determined    6500 

When  not  material   6501 

Modification.     Rescission   6502 

The  Policy: 

Defined 6503 

What  must  specify   6504 

Applied  only  to  interest 6505 

Insurance  by  trustee  or  agent 6506 

Terms  govern  joint  or  common  interest 6507 

Only  person  intended  may  claim  benefit 6508 

.  Benefit  of  any  owner 6509 


GENERAL  INDEX  143 

Section 

Transfer    suspends    6510 

Classified   6511 

Open     6512 

Va  lued   6513 

Running    6514 

Receipt  for  premium.     Effect  of 6515 

Agreement  not  to  transfer  void 6516 

Holder  may  surrender  for  cancellation 6517 

Notice  necessary  to  forfeit 6518 

Warranties: 

Classified   6519 

No  form  necessary 6520 

Express.     Must  be  written 6521 

To  what  time  may  relate 6522 

What  statement  of  fact  is  express  warranty 6523 

Statement  of  intention  a  warranty 6524 

As  to  future,  when  need  not  be  fulfilled 6525 

Rescission  for  violation  of  material 6526 

What   avoids   policy 6527 

Breach    without    fraud 6528 

Premium : 

When  premium  payable   6529 

When  insured  entitled  to  return 6530 

Premium  defined   6531 

Return  when  insurance  is  voidable .- 6532 

Not  entitled  to  return   6533 

Return  in  over  insurance  by  several 6534 

Contribution  to  return    6535 

Same     6536 

Loss: 

When  insurer  liable    6537 

Liability  for  loss  in  rescuing  6538 

Not  liable  for  peril  expected 6539 

Willful  act  exonerates ;  negligence  not 6540 

Notice  of  Loss: 

Without    unnecessary    delay 6541 

Only  best  proof  in  power  required 6542 

Defect  in.  how  waived 6543 

Delay   in,   how  waived 6544 

Time  in  which  to  make.     Blanks  to  be  furnished 6545 

Failure  to  furnish  certificate  of  another 6546 

Double  Insurance : 

Denned     6547 

Contribution  of  insurers    6548 


144  GENEEAL  INDEX 

Section 

Reinsurance: 

Defined     '. 6549 

Disclosures  required    6550 

Contract  of  indemnity   6551 

Original  insured  no  interest 6552 

Definition  of  Marine  Insurance: 

Definition    6553 

Insurable  Interest: 

Owner  always  has 6554 

Hypothecation  reduces  interest    6555 

Freightage  defined  as  insurance 6556 

Expected    freightage    6557 

Same    6558 

When  profits  insurable  interest   6559 

Charterer  has   6560 

Concealment : 

Disclosures  more  extensive 6561 

Belief  of  another  material 6562 

When  knowledge  of  loss  presumed 6563 

What  does  not  vitiate  entire  contract 6564 

Representations : 

Rescission  for  false 6565 

Without  fraud  does  not  void 6566 

Limited  Warranties: 

Seaworthiness    6567 

Seaworthy  defined 6568 

When  foregoing  warranty  complied  with 6569 

What   seaworthiness  includes 6570 

As  to  each  part  of  the  voyage 6571 

Delay  in  repairing  exonerates 6572 

Seaworthy  as  to  cargo  6573 

Neutral   papers    6574 

The  Voyage  and  Deviation: 

Voyage  fixed  by  mercantile  usage 6575 

When   not  so  fixed 6576 

Deviation   defined    6577 

When  proper    6578 

Improper    6579 

Insurer  not  liable  after '. 6580 

Loss: 

Classified    6581 

Partial     6582 

Total  loss  classified 6583 

Actual  total    6584 

Constructive  total    6585 


GENERAL  INDEX  145 

Section 

When  actual  loss  presumed 6586 

Duty  to  procure  another  ship  for  cargo 6587 

Liable  for  cost  of  reshipment 6588 

Payment  without  notice 6589 

General  average  loss 6590 

What  against  actual  total  loss  covers  6591 

Abandoment : 

Defined     6592 

When  authorized   6593 

Must  be  absolute   6594 

When   made    6595 

When  becomes  ineffectual 6596 

Made  by  written  notice 6597 

Eequisites  of  notice   6598 

Sustained  only  on  cause  specified 6599 

Equivalent  to  transfer 6600 

Payment  entitles  insurer  to  salvage 6601 

Insurer 's  agents  become  insurer 's  on  abandonment 6602 

Acceptance  of  unnecessary   6603 

Acceptance   conclusive    6604 

Acceptance  is  irrevocable    6605 

To  whom  freightage  belongs   after 6606 

Refusal  to  acecpt   6607 

Rights,  if  abandonment  omitted 6608 

Measure  of  Indemnity: 

Valuation   conclusive   between   parties 6609 

Partial  loss.     Liability    6610 

Recovery  of  profits,  how  estimated 6611 

How  loss  determined  on  valued  policy 6612 

When  loss  of  profits  presumed 6613 

How  loss  on  open  policy  estimated 6614 

How  partial  loss  of  cargo  estimated 6615 

Liability  for  repairs  and  labor  to  recover 6616 

Liability  for  insurer's  contribution  to  general  average 6617 

Subrogation  of  right  to  contribution 6618 

Liability  for  partial  loss  of  ship 6619 

Eire  Insurance: 

Rescission  for  alteration  in  use  increasing  risk 6620 

Not  is  risk  not  increased 6621 

When  contract  unaffected,  though  risk  increased 6622 

Measure  of  indemnity 6623 

Face  of  policy  to  be  paid  in  case  of  loss 6624 

Standard  policy 6625 

Construction  of  standard  policy 6626 


146  GENERAL  INDEX 

Section 
Life  and  Health  Insurance: 

When  payable    6627 

In  whom  person  has  insurable  interest 6628 

Policy    transferable    6629 

When  notice  of  transfer  unnecessary 6630 

Measure  of  indemnity   6631 

Agent   defined    6632 

Suicide  no  defense  after  one  year 6633 

Standard   forms  of  Insurance   Policies;    Provisions   in   Life    Insurance 
Policies : 

Authority  required  to  issue  policies 6634 

Standard    forms    -.  6635 

Single   premium  policies    6635a 

Term  insurance    6635b 

Provisions  of  life  policies 6635c 

Provisions   prohibited    6635d 

Preliminary  term  policies 6635e 

Form  filed  with  insurance  commissioner 6635f 

Provisions  restricted   6635g 

What  companies  exempt   6635h 

Company    defined    6635i 

policy  must  contain  entire  contract   6636 

Policies  of  Health  or  Accident  Insurance: 

Provisions   required    , 6637 

Provisions   forbidden    6638 

Application  of  this  chapter 6639 

Form  of  policy  to  be  filed 6640 

Indemnity : 

Defined    6641 

Against  unlawful  act  void 6642 

Against  act  done  valid,  unless  felony 6643 

Against  act  of  person  includes  agents 6644 

Several  includes  each   6645 

When  liable  jointly  with  person  indemnified 6646 

Rules  to  be  applied  in  interpretation 6647 

Engagement  to  answer  for  violation  of  duty.     Reimbursement 6648 

When  sureties  called  bail 6649 

Obligations   of   bail,   how   governed 6650 

Lotteries : 

Insuring   lottery    tickets 9669 

Advertising  same    9670 

Arson : 

Arson.     Nighttime.     Destroying  life 9499 

Arson    defined    9849 

Building  defined   W50 


GENERAL  INDEX  147 

Sectiou 

Inhabitable  building  defined 9851 

Nighttime  defined 9852 

Burning  defined    9853 

Ownership  defined   9854 

Immaterial.     Variance  in  proof j 9855 

Malice,  when  inferred '. 9856 

Burning  without  intent  to  destroy ' 9857 

Contiguous  buildings    ) 9858 

Degrees  of  arson 9859 

In  the  first  degree 9860 

Exception.     Appurtenance  to  building   9861 

Arson  in  second  degree ." 9862 

When  burning  in  nighttime  is 9863 

Arson  in  third  degree 9864 

When  burning  in  nighttime  is 9865 

Arson  in  fourth  degree 9866 

Punishment  for  arson    9867 

Fraudulently  Fitting  out  and  Destroying  Vessels: 

OfSeer  willfully  destroying  vessel 9977 

Others  same  9978 

Fitting  out  vessel  with  intent  to  wreck 9979 

Making  false  manifest   9980 

Fraudulent  Destruction  of  Property  Insured: 

Destroying   pro]  >ertv   insured 9981 

Presenting  false  proof  of  loss 9982 


4933L>: 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


